Trump Puts Iran Attack on Hold, Sends Oil Prices Lower

Oil prices dropped on Tuesday after US President Donald Trump announced he had paused planned attacks on Iran to allow for negotiations. The move came as Tehran proposed a peace deal, including an end to hostilities and reparations for war damage.

Brent crude futures fell 1.5%, or $1.73, to $110.37 a barrel, while US West Texas Intermediate crude slipped 0.60% to $108.03. The more active July contract dropped 0.8% to $103.56.

Ole Hansen of Saxo Bank noted that Trump's comments drove oil lower, citing the lack of meaningful developments in ending the war. The Middle East conflict has effectively closed the Strait of Hormuz, a critical waterway carrying about a fifth of global oil and gas supplies.