Global oil prices fell on Tuesday after US President Donald Trump announced a pause in a planned strike on Iran, opting instead to give diplomacy more time to end the conflict.
Global benchmark Brent crude futures for July delivery dropped $1.73, or 1.5 per cent, to $110.37 per barrel by 08:25 GMT. Meanwhile, US West Texas Intermediate crude for June delivery, which has now expired, fell 63 cents, or 0.6 per cent, to $108.03 a barrel.
The more actively traded July WTI contract also recorded losses, slipping 82 cents, or 0.8 per cent, to settle at $103.56 per barrel.
Trump said in a social media post yesterday that the US had postponed a military operation against Iran that had reportedly been scheduled for Tuesday, as negotiations aimed at securing a deal were still underway. He also warned that military action could resume if diplomatic efforts failed.
Tensions in the Middle East have severely disrupted shipping through the Strait of Hormuz, a strategic passage used for transporting nearly one-fifth of the world’s oil and liquefied natural gas supplies. The International Energy Agency described the situation as the most significant global oil supply disruption in recent years.
According to Iranian state media, Iran’s latest proposal to the US includes a halt to hostilities across the region, including in Lebanon, the withdrawal of US forces from areas near Iran, and compensation for damage caused during the conflict.
Iran-US talks continue through Pakistan despite key differences
