Oil Prices Drop as Trump Pauses Iran Strike After Gulf Leaders Appeal

TLDR

• Brent crude fell 1.5% to $110.39 after Trump said he called off a planned strike on Iran
• Saudi Arabia, Qatar, and the UAE asked the US to hold off as “serious negotiations” were underway
• Oil benchmarks are still up over 80% this year and 20% in the past month
• A US naval blockade has kept Iran’s Kharg Island oil terminal idle for at least 10 days
• The US extended its sanctions waiver on Russian oil stranded at sea for another 30 days

Oil prices pulled back on Tuesday after President Donald Trump announced he had paused 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 well above where they started the year.

Trump Pauses Strike After Gulf Leaders Step In

He added that the US is prepared to strike if an acceptable deal isn’t reached, but he did not set a deadline.

Traders appear to have largely priced in the uncertainty. Analysts say Trump’s announcements are having less impact on markets than they once did.

Iran did not immediately confirm that fresh talks were underway.

Strait of Hormuz Closure Keeps Oil Prices Elevated

The market has been watching the Strait of Hormuz closely. The waterway is a key 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. That has cut off Tehran’s petroleum revenues and pulled millions of barrels from the market.

Iran had previously barred other nations’ vessels from the strait in the early weeks of the conflict, making it the dominant crude exporter through the waterway at that time. That has since reversed.

Analysts say prices are unlikely to fall sharply until there is a clear path to reopening the strait.

Oil benchmarks are up more than 80% this year and 20% over the past month, reflecting how much the conflict has disrupted global supply.

Russia Crude Waiver Extended

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

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

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

As of Tuesday, oil prices remain elevated with no firm resolution in sight on the Strait of Hormuz.

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