Key Takeaways

• Crude falls: Brent oil futures fell 1.5% to $110.43 per barrel, while WTI dropped 1.1% to $103.33.
• Trump postpones attack: The president said he had delayed a planned military attack on Iran initially set for Tuesday.
• “Serious negotiations”: Trump confirmed peace talks are actively ongoing.
• Gulf countries’ plea: Trump said he stood down at the request of Gulf nations.
• Conditional warning: Trump warned of a “full, large scale assault of Iran” if no deal is reached.
• Nuclear weapons red line: The president reiterated Iran cannot have a nuclear weapon.
• Hormuz still shut: The strait continues to disrupt roughly 20% of global crude supply.
• Two-week rally context: Crude had surged on reports the U.S. and Israel were weighing more strikes.
• Nuclear sticking point: Washington demands complete cessation of uranium enrichment as part of any deal.
• Iran’s red line: Tehran demands removal of the U.S. naval blockade before any peace deal.
• Russian waiver extended: The U.S. Treasury extended the sanctions waiver allowing Russian seaborne oil purchases for another 30 days.
• Policy reversal: The Treasury reversed earlier plans to let the waiver expire.
• China and India relieved: Major Asian importers had been hit hard by Iran war disruptions and turned to Russian oil.
• Vulnerable countries’ request: The extension was requested by poor and vulnerable nations cut off from Gulf supplies.

Oil prices fell sharply during Asian trading on Tuesday after U.S. President Donald Trump said he had postponed a planned attack on Iran and that negotiations with the country were ongoing.

The U.S. extended a waiver on sanctions against seaborne Russian oil to offset supply disruptions in the Middle East, also helping bring down crude prices.

Brent oil futures for July fell 1.5% to $110.43 a barrel, while West Texas Intermediate crude futures fell 1.1% to $103.33 a barrel by 01:33 ET (05:33 GMT).

Trump Postpones Iran Attack, Touts Peace Talks

Crude fell chiefly after Trump said he was postponing a planned military attack on Iran, and that “serious negotiations” were taking place.

The attack had been initially planned for Tuesday, with Trump stating in a social media post that he had been asked to stand down by Gulf countries.

Still, Trump warned that the U.S. would proceed with a “full, large scale assault of Iran” if no deal was reached. He also reiterated that the country could not have a nuclear weapon.

Oil had risen sharply over the past two weeks as a host of reports showed the U.S. and Israel considering more military action against Iran.

The Strait of Hormuz also remained effectively closed, disrupting roughly 20% of the world’s crude supply.

Reports last week had shown U.S.-Iran talks largely dithering, especially after Trump rejected Iran’s response to a peace proposal.

Tehran’s nuclear activities are a major sticking point in peace talks, with Washington demanding a complete cessation of uranium enrichment as part of any peace deal.

Iran has in return called for a removal of the U.S. naval blockade before any peace deal can be reached. The countries were seen remaining at an impasse after more than two months of hostilities.

US Extends Russian Sanctions Waiver Allowing Oil Purchases

The U.S. Treasury on Monday announced another 30-day extension of a sanctions waiver allowing the purchase of Russian seaborne oil — especially by countries viewed as vulnerable to disruptions from the Iran war.

The move saw the Treasury reverse earlier plans to not extend the waiver.

A slew of Asian countries, including major importers China and India, saw their oil supplies disrupted by the Iran war, and had returned to Russian buying to offset worsening Middle East supplies.

Reuters reported the waiver was requested by poor and vulnerable countries that cannot get Gulf oil shipments due to the closure of Hormuz.