Oil tumbles as Trump cancels attack on Iran to reach deal aimed at reopening Hormuz

Oil prices experienced a significant drop on Monday following US President Donald Trump's decision to cancel a planned attack on Iran and pursue a deal aimed at reopening the Strait of Hormuz. Brent crude futures fell by $4.49, or 5.11%, to $83.44, while US West Texas Intermediate crude decreased by $4.90, or 5.79%, to $79.77 per barrel.

The market decline came as tensions between the US and Iran had escalated, with attacks on several tankers around Oman causing security concerns and deterring shippers from entering the Gulf to load oil. Trump's announcement, made through his Truth Social platform, indicated that Iran and other Middle Eastern countries had requested time to finalize a deal that would lead to the reopening of the vital strait and an end to Iran's nuclear threat.

Analysts are concerned that this week's developments could follow a similar pattern to last week, with hopes of a deal collapsing as Iran continues to leverage its control over the Strait, potentially through an attack on a US base or a tanker transiting the waterway. Additionally, Opec+ approved an oil production quota increase of around 188,000 barrels per day from September, signaling a broader effort to address export disruptions caused by the Iran-Ukraine wars.

Brief written by urgent.news from Dawn's own syndicated text. Machine-written — may contain errors; check the original before relying on it.