Oil prices ease as Trump postpones planned strike on Iran

US President Donald Trump has said he is postponing a planned attack on Iran after requests from Gulf leaders and amid what he described as serious negotiations with Tehran. The announcement, made on social media on Monday, came as traders reacted to the reduced risk of an immediate military escalation in the Gulf. Brent crude and West Texas Intermediate both fell after the comments, reflecting a quick market response to the change in tone.

Sponsored

According to the supplied material, Brent crude dropped 1.33% to $110.61 a barrel, while West Texas Intermediate futures fell 0.91% to $103.43. Trump said the strike had been scheduled for Tuesday, but would not go ahead for now because talks were under way. The row also says Iran had responded to a new US proposal aimed at ending the war, although no details of that response were provided.

The immediate significance is both political and economic. A pause in the threat of force reduces the chance of a sudden disruption to Gulf oil exports, which have already been under strain. The International Energy Agency warned on Monday at the Group of Seven finance leaders meeting in Paris that commercial oil inventories are depleting rapidly and that the world has only a few weeks' worth of oil reserves left because of the Strait of Hormuz closure.

The agency said further price volatility is likely ahead of the peak summer demand period. The wider context is a confrontation that has already affected global energy flows. The supplied material says preliminary IEA data show global oil stockpiles fell by 129 million barrels in March and by another 117 million barrels in April after US and Israeli strikes on Iran and the subsequent disruption to Gulf exports.

Sponsored

It also says cumulative crude supply losses from Gulf producers have now exceeded one billion barrels, with more than 14 million barrels a day unable to leave the region. Those figures underline why any shift in US policy toward Iran is being watched closely by markets and governments alike. The Strait of Hormuz remains central to the dispute because it is a key route for oil shipments out of the Gulf.

The IEA said demand could begin to recover later in the year if an agreement is reached to gradually restore flows through the strait from the third quarter onwards. That makes the current talks significant not only for the immediate risk of military action, but also for the outlook for energy supply and prices in the months ahead. The Gulf leaders cited by Trump are important because they are both regional powers and diplomatic actors with direct security and economic interests.

Their reported request for a delay suggests concern that a strike could widen the conflict or further destabilise oil markets. It also shows that the crisis now involves Washington, Tehran and neighbouring states, with the outcome likely to affect shipping, energy security and broader regional stability. What remains unclear is how far the negotiations with Tehran have progressed and whether the postponement marks a lasting change or only a temporary pause.

#Iran #Trump #oilprices #StraitofHormuz #IEA

Sponsored