Oil Prices Decline After Trump Halts Iran Strike at Gulf Leaders’ Request

TLDR

• Brent crude declined by 1.5% to $110.39 after Trump stated he had called off a planned strike on Iran
• Saudi Arabia, Qatar, and the UAE requested the US to delay its actions as “serious negotiations” were reportedly underway
• Oil benchmarks have risen more than 80% this year and 20% in the past month
• A US naval blockade has kept Iran’s Kharg Island oil terminal inactive for at least 10 days
• The US extended its sanctions waiver on Russian oil stranded at sea for an additional 30 days

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(SeaPRwire) –   Oil prices declined on Tuesday after President Donald Trump announced he had suspended a planned military strike on Iran, following appeals from Gulf allies.

Brent crude dropped 1.5% to $110.39 a barrel. West Texas Intermediate fell 0.7% to $103.64. Both benchmarks remain significantly higher than where they started the year.

Trump Halts Strike Following Gulf Leaders’ Intervention

Trump posted on social media that the leaders of Saudi Arabia, Qatar, and the United Arab Emirates asked the US to postpone attacks scheduled for Tuesday. He said “serious negotiations” were now taking place with Iran.

“I put it off for a little while, hopefully maybe forever, but possibly for a little while,” Trump remarked at a White House event Monday evening.

He also noted that the US remains ready to strike if a satisfactory agreement is not reached, though no deadline was established.

Traders appear to have largely anticipated the uncertainty. Analysts suggest Trump’s announcements are having diminishing influence on markets compared to earlier periods.

“These hot air verbal interventions from Trump previously had a strong bearish impact on prices, but they currently seem to have less and less effect unless backed by tangible developments,” commented Bjarne Schieldrop, chief commodities analyst at SEB AB.

Iran has not yet confirmed the existence of new talks.

Strait of Hormuz Closure Maintains Elevated Oil Prices

The market has been closely monitoring the Strait of Hormuz. This waterway serves as a crucial route for Persian Gulf oil exports, and its near-total closure has tightened global supply.

A US naval blockade has left Iran’s Kharg Island oil terminal idle for at least 10 days. This has cut off Tehran’s petroleum revenues and removed millions of barrels from the market.

Previously, during the early weeks of the conflict, Iran had blocked other nations’ vessels from the strait, making it the leading crude exporter through the waterway at that time. That situation has since reversed.

Analysts indicate that prices are unlikely to drop sharply until there is a clear pathway to reopening the strait.

Oil benchmarks have increased by over 80% this year and 20% over the past month, reflecting how much the conflict has disrupted global supply chains.

Russia Crude Waiver Renewed

Separately, the US renewed a sanctions waiver on Russian crude oil already loaded onto tankers for another 30 days.

Treasury Secretary Scott Bessent explained that the extension would help stabilize the physical crude market and ensure oil reaches the most “energy-vulnerable” countries.

The previous waiver expired just days before the new one was issued.

As of Tuesday, oil prices remain high with no definitive resolution apparent regarding the Strait of Hormuz.