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US Oil Update: Crude Benchmarks Decline After Trump Halts Strikes on Iran

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Crude oil futures retreated sharply on Monday as markets trimmed geopolitical risk premiums following a de-escalation in US-Iran military tensions.

Front-month West Texas Intermediate crude futures declined 6.9% to $78.84 per barrel, while Brent futures dipped 5.6% to $83.06 per barrel.

"This followed reports over the weekend that President Donald Trump said the US would hold off on new strikes against Iran. Iran and other Gulf nations indicated they are working toward a deal," Commerzbank analysts said.

Meanwhile, Iran's Foreign Minister Seyyed Abbas Araghchi has said that negotiations with Oman over the control of the Strait of Hormuz were in advanced stages, according to a post on the Telegram messenger app on Sunday.

Araghchi said progress had been made on the negotiations, noting that they were now in "final stages," as Tehran insists that the strategically crucial waterway, which usually accounts for one-fifth of global LNG flows and one-fourth of the seaborne oil trade, would never return to its pre-war status.

However, physical maritime transit through the Strait of Hormuz remained severely constrained.

Heightened security risks, vessel inspections, and ongoing military warnings continued to deter commercial operators, with maritime data from MarineTraffic showing just five vessel crossings through the corridor on July 30, down from 22 a day earlier.

Meanwhile, on the supply side, OPEC+ approved an oil production quota increase of approximately 188,000 barrels per day starting in September, completing the unwinding of a specific layer of voluntary output curbs.

The supply bottlenecks have been further magnified by Ukrainian drone strikes targeting the Caspian Pipeline Consortium terminal on Russia's Black Sea coast, prompting Moscow to extend its domestic diesel export ban through September 1 to stabilize internal supplies.

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