Oil prices fell on Tuesday after U.S. President Donald Trump said he had postponed a planned military strike on Iran, offering markets some relief after days of concern that a wider conflict could put more pressure on global crude supplies.
Brent crude futures for July delivery dropped by more than 2% to $109.15 a barrel, while West Texas Intermediate slipped 1.27% to $107.28 a barrel. The move reflected a partial easing of the risk premium that had built up as traders watched for signs of further escalation between Washington and Tehran.
Trump said on Monday that he had delayed a “scheduled attack of Iran tomorrow” after appeals from the leaders of Qatar, Saudi Arabia, and the United Arab Emirates. His remarks came as a surprise, with little public indication beforehand that the United States had been preparing for imminent military action.
The decision appeared to reduce the immediate threat to a fragile ceasefire reached on 8 April, although uncertainty remains over whether diplomatic efforts can hold. Any renewed fighting involving the United States and Iran would be closely watched by energy markets because of the potential impact on shipping routes in the Gulf.
Earlier on Monday, Trump told the New York Post that Iran knows “what’s going to be happening soon,” but did not elaborate. Axios later reported that the president had been considering fresh military action after Iran’s latest proposal in talks aimed at ending the conflict fell short of expectations.
Speaking later at a White House event, Trump said, “We were getting ready to do a very major attack tomorrow.”
“I put it off for a little while, hopefully maybe forever, but possibly for a little while” because “we’ve had very big discussions with Iran, and we’ll see what they amount to,” he said.
Despite the fall in prices, analysts said the oil market remains far from settled. ING said traders are still pricing in the risk of persistent supply disruption in the Middle East, particularly as hopes for progress following recent Trump-Xi talks failed to materialise.
The firm said some movement through the Strait of Hormuz had resumed, including several crude tankers and an Iraqi shipment bound for Vietnam. However, it warned that flows remain below normal and could weaken again if tensions rise.
“The ongoing supply disruptions mean the market has had to rely largely on inventory and alternative supply, where possible,” its analysts wrote.