(RTTNews) – Reversing the gains from Friday’s session, crude oil prices have gone into freefall on Monday, with supply-disruption threats diminishing after U.S. President Donald Trump called off an earlier planned attack on Iran. However, Iran’s staunch denial of negotiating with the U.S. kept up the tensions and limited the decline.
WTI Crude Oil for September month delivery was last seen trading down by $4.77 (5.63%) at $79.90 per barrel.
In the U.S.-Iran conflict, which began on February 28, Trump stated on Friday that U.S. forces will be hitting Iran very hard to the point that Iran cannot take it anymore. In apparent frustration, Trump commented that he was losing faith in negotiations with Iran.
On Saturday, the U.S. embassies in Jordan, Iraq, and Israel cautioned U.S. citizens and issued security alerts.
However, late Saturday, through a Truth Social post, Trump announced that though U.S. forces were locked and loaded against Iran to engage in an attack not seen since World War II, Iran, along with other Middle Eastern countries, asked him to hold off any attack as they confirmed that the “perimeters” of a deal have been agreed to.
Trump affirmed that the points of agreement included the immediate reopening of the Strait of Hormuz, and he added that hence was cancelling the planned attacks.
Cautioning Iran indirectly, Trump urged Iran to rapidly make a deal with the U.S. as he may resort to attacks if it fails to do so.
Later on Sunday, Trump told reporters aboard Air Force One that he cancelled the strikes at the request of Qatar, the United Arab Emirates, and Saudi Arabia.
Trump added that a new round of talks between the U.S. and Iran were set to begin Monday afternoon but did not reveal much detail on who would take part in the talks.
Iran denied any negotiations happening with the U.S., and Iran’s semi-official news agency Mehr denied Iran asking the U.S. to hold off any military offensives.
Iran’s Foreign Ministry Spokesperson Esmaeil Baghaei stated that Iran is currently negotiating only with Oman to reach an agreement on the security of shipping passage through the Strait of Hormuz but not with the U.S.
Standing by what he stated, Trump said through Truth Social that the Iranian regime is “duplicitous.”
Trump stressed that the Strait of Hormuz is completely controlled by the U.S. Navy and added that the U.S. is talking for a solution no matter what Iran says.
The Strait of Hormuz, a conduit for 20% of the global oil and energy trade, remains largely shut.
Kpler’s data revealed that 51 vessels passed through the Strait of Hormuz between July 30 and August 2, a 28% drop compared to the previous 4 days when nearly 71 transits were recorded.
Kpler’s data also showed that only nine vessels crossed the strait on Sunday, a majority of them using an Iran-controlled route.
On Sunday, the seven members of the Organization of Petroleum Exporting Countries who already agreed to undertake voluntary output cuts, consented to hike crude oil production by 188,000 barrels per day for the month of September.
Experts are of the view that if the U.S. and Iran strike a deal, it could allow seamless passage through the Strait of Hormuz as well as the Bab el-Mandeb in the Red Sea. If no agreement is reached, the resultant escalation could keep oil prices on the higher side.
According to Bloomberg, after drone attacks disrupted shipping operations, four tankers completed loadings in recent days at a Black Sea port in Kazakhstan. Kazakhstan is the second-largest source of crude oil imports for Europe.
The U.S. dollar index was last seen trading at 99.94, up by 0.03 (or 0.03%) today.
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