Oil prices drop after Trump cancels attack on Iran to seek nuclear deal
Summary
- Trump says US will hold off fresh Iran attack to reach quick deal
- OPEC+ agrees September oil output hike
- Brent and WTI jumped more than 20% last month
- Two tankers with Saudi crude left Red Sea over the weekend, data shows
(Reuters) – Oil prices fell more than $4 a barrel on Monday after U.S. President Donald Trump held off a fresh attack on Iran as he sought a quick deal that would halt Tehran’s nuclear ambitions and reopen the Strait of Hormuz.
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Brent crude futures fell $4.23, or 4.8%, to $83.70 by 1011 GMT, having retraced some losses from a three-week low hit earlier in the session. U.S. West Texas Intermediate crude was at $79.60 a barrel, down $5.07, or 6%. Both benchmarks marked their biggest daily falls in absolute and percentage terms since last Monday.
Both contracts had jumped more than 20% last month after fighting between the U.S. and Iran resumed and attacks on several tankers around Oman heightened security concerns, deterring shippers from entering the Gulf to load oil.
In a sign of de-escalation, Trump said late on Saturday on his Truth Social platform that Iran and other Middle Eastern countries had asked for time to complete a deal that would lead to “the Immediate, Complete and Total” reopening of the Strait and “an end to Iran’s nuclear threat”. Details remain unclear.
CAN A DEAL HAPPEN?
“The bigger focus is whether this week turns into a rinse and repeat of last week — with hopes of a deal collapsing as Iran digs in its heels and continues to leverage its control over the Strait,” IG market analyst Tony Sycamore said.
Two tankers laden with Saudi oil crossed the Bab el-Mandeb Strait out of the Red Sea over the weekend but traffic both in the Strait of Hormuz and Bab el-Mandeb slowed, shipping data showed.
The United Kingdom Maritime Trade Operations has reported three more tanker attacks since Saturday.
On Sunday, the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, approved an oil production quota increase of around 188,000 barrels per day from September.
Export disruptions from the Gulf, Russia and Kazakhstan, caused by the Iran and Ukraine wars, have meant successive monthly OPEC+ hikes over most of this year have not translated into extra oil on the market and have had little impact on prices.
additional reporting by Florence Tan and Sam Li; Editing by Barbara Lewis and David Holmes
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