Oil prices fall as Trump postpones Iran strike, easing supply disruption fears

Oil prices fell on Tuesday after U.S. President Donald Trump said he would postpone a planned military strike against Iran at the request of Middle Eastern leaders.

International comparison Brent crude futures July delivery fell more than 2% to $109.15 a barrel. West Texas Intermediate futures fell 1.27% to $107.28 per barrel.

Trump said on Monday he was shelving plans for a “planned attack on Iran tomorrow” at the requests of the leaders of Qatar, Saudi Arabia and the United Arab Emirates.

Before his comments on Truth Social, there was little public indication that Washington was preparing for imminent military action against Iran that would effectively end the fragile ceasefire reached on April 8.

Earlier Monday, Trump told the New York Post that Iran knew “what’s going to happen soon” but did not provide details.

Axios reported that Trump was considering renewed military action after Tehran’s latest offer in talks aimed at ending the conflict fell short of expectations.

Speaking at an event held at the White House later in the day, Trump said, “We were preparing for a very big attack tomorrow.”

“I’ve put that off for a while, hopefully forever, but probably for a short time,” he said, because “we’ve had very big discussions with Iran and we’ll see what that all means.”

ING stated that oil markets continue to price in permanent supply disruptions in the Middle East and noted that hopes that China would mediate progress in the recent Trump-Xi talks did not come true.

Some shipping activity through the Strait of Hormuz has resumed, including a few crude tankers and Iraqi oil shipments bound for Vietnam, but flows remain well below normal levels and could deteriorate quickly, analysts from the banking and financial services firm said.

“Ongoing supply disruptions mean the market has been forced to rely heavily on stockpiles and alternative supply where possible,” they wrote.