Oil prices fell sharply Monday after President Donald Trump said he had called off a planned strike on Iran following a request from Tehran and other Middle Eastern countries to pause the fighting.
Trump said talks would begin Monday after Iran and other countries asked him to pause any new attacks in the five-month-old conflict
Bloomberg / Getty Images
Oil prices fell sharply Monday after President Donald Trump said he had called off a planned strike on Iran following a request from Tehran and other Middle Eastern countries to pause the fighting.
As of 5:12 a.m. ET Monday, West Texas Intermediate crude for September delivery was trading at $79.94 a barrel, a decline of 5.59%. Brent crude, the international benchmark, shed 4.63%, settling at $83.86 a barrel.
Trump said early Sunday that the outlines of a deal had been agreed to. "We have just been asked by Iran, and other Middle Eastern Countries, to hold off any attack in that the perimeters of a deal has been agreed to," he wrote in a Truth Social post, according to CNBC. He said any agreement would include the opening of the Strait of Hormuz and an end to Iran's nuclear threat. He also said talks with Iran would begin Monday, according to the New York Times.
Iran's response was measured. Seyyed Majid Ibn Al-Reza, Iran's acting defense minister, said his country considered "every threat to be real," while characterizing Trump's statements as part of a "psychological and cognitive warfare campaign." Fars International, the news agency tied to the Islamic Revolutionary Guard Corps, called Trump's demands nothing more than a "wish list," according to CNBC.
A deal to reopen the Strait of Hormuz would allow oil tankers, which have been effectively blocked during the conflict, to resume normal shipping. Prior to the outbreak of hostilities, the strait had handled roughly 130 vessel transits daily. Over the weekend, only 20 vessels made the crossing, according to maritime data company Kpler, as cited by the New York Times.
Despite Monday's price drop, U.S. crude remained about 20% above its pre-conflict level. Oil has surged past $100 a barrel multiple times since fighting began, pushing up the cost of gasoline, jet fuel, and diesel. Gasoline's national average held at $4.10 a gallon Monday — a toll more than 37% heavier than before the war — while diesel averaged $5.36 a gallon, reflecting a jump of more than 42% over the same period.
OPEC Plus voted Sunday to lift output by about 188,000 barrels a day, framing the decision as a measure aimed at steadying the oil market.
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