Oil Falls as Trump Delays Iran Strike and U.S. Extends Russian Oil Waiver

Oil Prices Drop on De-escalation Signals from Washington

By 01:33 ET (05:33 GMT) on Tuesday, Brent oil futures for July were down 1.5% at $110.43 a barrel, while West Texas Intermediate (WTI) crude futures fell 1.1% to $103.33 a barrel. The declines followed comments from President Trump that he had postponed a planned “full, large scale assault of Iran” that had initially been scheduled for Tuesday.

Trump said “serious negotiations” with Iran were taking place and indicated he had been asked by Gulf countries to stand down on the immediate attack. He reiterated, however, that the United States would proceed with a large-scale assault if no deal were reached, and stressed that Iran could not have a nuclear weapon.

Oil benchmarks had risen sharply over the prior two weeks amid reports that the United States and Israel were considering additional military action against Iran. The Strait of Hormuz, a key transit route, remained effectively closed, disrupting roughly 20% of global crude supply. Reports last week indicated that U.S.-Iran talks were largely stagnating, particularly after Trump rejected Iran’s response to a peace proposal.

Tehran’s nuclear activities remain a central obstacle in the talks, with Washington demanding a complete halt to uranium enrichment as part of any agreement. Iran has called for the removal of a U.S. naval blockade before any peace deal can be finalized, leaving the two sides at an impasse after more than two months of hostilities.

U.S. Extends Waiver on Sanctions for Russian Seaborne Oil

Also weighing on prices, the U.S. Treasury on Monday announced a further 30-day extension of a sanctions waiver permitting purchases of Russian seaborne oil. The extension is aimed at countries considered vulnerable to supply disruptions resulting from the Iran conflict and the closure of Hormuz.

The Treasury’s move reversed earlier plans not to prolong the waiver. Several Asian countries, including major importers China and India, have seen their oil supplies disrupted by the Iran war and have increased Russian oil purchases to compensate for reduced Middle Eastern shipments. According to Reuters, the waiver extension was requested by poorer and more vulnerable countries that are currently unable to secure Gulf oil due to transit constraints.

FAQ

Why did oil prices fall on Tuesday?
Oil prices fell after President Trump announced he was postponing a planned attack on Iran and indicated ongoing negotiations, and after the U.S. Treasury extended a sanctions waiver that allows continued purchases of Russian seaborne oil.

What are the latest Brent and WTI price levels mentioned?
As of 01:33 ET (05:33 GMT) on Tuesday, Brent futures for July were at $110.43 a barrel, down 1.5%, and WTI crude futures were at $103.33 a barrel, down 1.1%.

How is the Strait of Hormuz affecting global oil supply?
The Strait of Hormuz remained effectively closed, disrupting roughly 20% of the world’s crude supply and contributing to recent volatility in oil prices.

What is the purpose of the U.S. sanctions waiver on Russian seaborne oil?
The waiver allows continued purchases of Russian seaborne oil, particularly by poorer and vulnerable countries, to offset supply disruptions stemming from the Iran war and the closure of shipping routes through the Gulf region.