On Tuesday, crude oil prices declined following remarks by U.S. President Donald Trump indicating that he would delay a planned military strike against Iran. The decision which was made at the request of several key Middle Eastern leaders, alleviated immediate market concerns over a potential escalation in the region that could disrupt global crude supplies.
International benchmark Brent crude futures for July delivery fell more than 2 percent to trade at USD 109.15 per barrel, while West Texas Intermediate futures declined by 1.27 percent to USD 107.28 per barrel. President Trump stated on Monday that he had shelved plans for a “scheduled attack on Iran tomorrow” following appeals from the leaders of Qatar, Saudi Arabia, and the United Arab Emirates.
Prior to President Trump’s comments on the Truth Social platform, there had been little public indication that the United States was preparing imminent military action against Iran, a move that would have effectively ended the fragile ceasefire established on April 8. Earlier on Monday, Trump said that Iran knew “what’s going to be happening soon,” without providing further details. Furthermore, the President had been weighing renewed military action after Tehran’s latest proposal in ongoing talks fell short of expectations.
Oil Supply Risks Linger
According to ING, oil markets continue to price in persistent supply disruptions in the Middle East, noting that hopes for China to facilitate progress during recent Trump-Xi talks failed to materialize. Analysts at the financial services firm observed that some shipping activity through the Strait of Hormuz has resumed, including several crude tankers and an Iraqi oil shipment bound for Vietnam. Nevertheless, they cautioned that flows remain significantly below normal levels and could deteriorate rapidly.
