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3. Oil Prices Retreat as Trump Delays Iran Strike Amid Diplomatic Push

Global oil prices fell on Tuesday after U.S. President Donald Trump announced he had postponed a planned military strike on Iran, opting instead to give diplomacy another chance in an effort to end the escalating conflict in the Middle East.

In a statement posted on social media Monday evening, Trump said a U.S. attack initially scheduled for Tuesday had been suspended while negotiations with Tehran continued. However, he warned that Washington remained prepared to resume military operations should talks fail to produce an agreement.

The announcement eased some fears in energy markets, sending crude prices lower after days of volatility linked to the regional conflict. Global benchmark Brent crude futures for July delivery dropped by $1.13, or 1%, to $110.97 per barrel by midday trading. Meanwhile, U.S. West Texas Intermediate (WTI) crude for June delivery, set to expire Tuesday, slipped 28 cents to $108.38 per barrel. The more actively traded July WTI contract declined 61 cents, or 0.6%, to $103.77.

Despite the temporary market relief, concerns over global energy supplies remain acute. The ongoing conflict has effectively shut down the Strait of Hormuz, one of the world’s most strategically important maritime chokepoints. The waterway typically handles nearly 20% of global oil and liquefied natural gas shipments. According to the International Energy Agency, the disruption represents the most severe oil supply shock in recent years.

Iranian state media reported Tuesday that Tehran had submitted a new peace proposal to Washington. The proposal reportedly includes a cessation of hostilities across multiple fronts, including Lebanon, the withdrawal of U.S. forces from areas near Iran, and compensation for damage caused during the war.

In a separate development, U.S. Treasury Secretary Scott Bessent extended a sanctions waiver for an additional 30 days, allowing countries deemed “energy-vulnerable” to continue purchasing Russian seaborne oil. The move appears aimed at preventing further stress on global energy markets already strained by the Middle East crisis.

Meanwhile, the United States has continued tapping into its emergency oil reserves to stabilize supply. Data released by the Energy Department showed that 9.9 million barrels were withdrawn from the Strategic Petroleum Reserve last week — the largest weekly drawdown on record. U.S. stockpiles now stand at approximately 374 million barrels, their lowest level since July 2024.