Oil down after Trump called off strikes on Iran

Brent crude has plunged after US President Donald Trump stepped away from another round of military action against Iran, raising hopes that a diplomatic breakthrough is still possible.

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Tehran launched attacks on US military assets on Friday, including the Ahmad al-Jaber Air Base in Kuwait and facilities at Bahrain’s Sheikh Isa Air Base, Iranian media reported.

Market disruptions threatened to escalate further on Saturday, after Trump warned the US was preparing what he called the “biggest attack since World War II” against Iran – only to call it off, citing assurances from regional leaders that a peace deal was within reach.

“We have just been asked by Iran, and other Middle Eastern Countries, to hold off any attack in that the perimeters of a deal have been agreed to,” Trump wrote on social media platform Truth Social.

The prospects of de-escalation have sent Brent’s price tumbling at Monday’s market open, leaving traders to wonder whether this diplomatic push will finally hold or simply repeat the false dawns of the past.

Adding to the diplomatic push, Iran’s foreign minister Abbas Araghchi said that negotiations with Oman regarding a new shipping arrangement via the Strait of Hormuz are in their final stages, the Financial Times reported.

Notably, Tehran has repeatedly ruled out options allowing commercial vessels to use the strait’s southern shipping lane off Oman's coast.

The latest draw in oil prices follow a volatile July that saw Brent crude surge over 20%, driven by renewed US-Iran hostilities and a blockade of the Bab al-Mandeb Strait – sparking fears of prolonged supply disruptions across the Strait of Hormuz and the Red Sea.

As of yesterday, the US Central Command (CENTCOM) has redirected 35 commercial vessels, disabled two, and boarded two to prevent ships from entering or departing Iranian ports, it said on social media platform X.

Without a comprehensive agreement, any fresh military escalation or renewed disruption to Gulf exports will likely send crude prices soaring again.

By Aparupa Mazumder

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