Oil prices fell more than 5% on Monday after President Donald Trump said he had called off a planned strike on Iran, easing the geopolitical risk premium built into crude since fighting began in February. Brent briefly slid further before paring the loss, and OPEC+ pressed ahead with another output increase even as Iran responded to the de-escalation with caution.
West Texas Intermediate crude for September delivery dropped nearly 6.17% to $79.45 a barrel in Asia trading Monday. Brent crude for October delivery fell 5.31% to $83.26 over the same session. Investors pared the geopolitical risk premium built into crude oil since the conflict began on Feb. 28.
Trump calls off strike, cites a Hormuz deal
Trump canceled the strike after describing it as the "biggest attack since World War II", ActionForex reported. He said the request came from Tehran and other Middle Eastern countries, and that the proposed deal would fully reopen the Strait of Hormuz and end what he called Iran's nuclear threat. Trump had reportedly been weighing another round of strikes on Iran amid fading prospects for a diplomatic resolution before the reversal. Talks between the two sides are set to resume Monday, though Trump declined to disclose a location or the participants.
Iran responds with caution
Iran's acting defense minister, Seyyed Majid Ibn Al-Reza, cast Trump's recent statements as a campaign of psychological and cognitive warfare, but said Tehran still treats every threat as real, according to a state media post on X. Iran's Fars International news agency, which is affiliated with the Islamic Revolutionary Guard Corps, dismissed Trump's proposal as amounting to a wish list, in a Telegram post Sunday.
Brent slide unwinds part of July's rally
Brent briefly slid as much as 7.3% to $81.55 a barrel before recovering, unwinding part of July's rally, Coinpedia reported. Even after the pullback, oil prices remain about 20% above pre-conflict levels. Brent had closed around $90 a barrel on Friday before this morning's slide toward $84. Separately over the weekend, OPEC+ approved a production quota increase of about 188,000 barrels per day from September, completing the rollback of a 1.65 million barrel-per-day cut made in 2023.
Sources: CNBC, Coinpedia, ActionForex
Trading involves risk.
Risk Disclaimer
