Oil dropped after President Donald Trump said the US would begin guiding neutral ships out through the Strait of Hormuz and signaled progress on talks with Iran to end the war now in its 10th week.
Brent declined below $108 a barrel, falling for a third day, while West Texas Intermediate was near $101. The planned move, beginning Monday, was meant to free up people, companies, and countries that “have done absolutely nothing wrong,” Trump said in a social-media post.
The US leader also said representatives were having very positive discussions with Tehran that could lead to something “very positive,” but didn’t offer additional details. Tehran, meanwhile, said Sunday it was reviewing Washington’s response to its recent 14-point plan, Iranian TV reported.
Crude has roared higher this year — hitting the highest level since 2022 last week — as the conflict upended markets, threatening slower economic growth and higher inflation. The surge has been underpinned by a double blockade of the strait, with Tehran preventing ships from exiting the Persian Gulf and the US interdicting vessels headed to or from Iranian ports.
“The drop is basically the market reacting to signaling: when the tone shifts toward de-escalation, even rhetorically, you see some of that premium come out,” said Haris Khurshid, chief investment officer at Karobaar Capital LP. Trump’s post “doesn’t remove the underlying tension,” he added.
In his post, Trump raised the prospect of responding with force if Iran sought to prevent the ships’ passage. “If, in any way, this Humanitarian process is interfered with, that interference will, unfortunately, have to be dealt with forcefully,” he said, without giving specifics.
Shortly after the war began, the president had said that the US would provide naval escorts to ensure safe passage for oil tankers and other vessels through the strait. The latest plan doesn’t currently involve Navy warships, the Wall Street Journal reported, citing an official.
Countries “have asked the United States if we could help free up their Ships,” Trump said in the post. “I have told my Representatives to inform them that we will use best efforts to get their Ships and Crews safely out of the Strait. In all cases, they said they will not be returning.”
The US blockade is designed to throttle Iarn’s economic lifeline and force the shut-in of local oil supply, with Treasury Secretary Scott Bessent saying at the weekend that well closures may start “in the next week” as the Islamic Republic’s storage was filling up.
At the weekend, OPEC agreed to a symbolic rise in June quota levels, as the group sought to send a business-as-usual message after the exit of the United Arab Emirates. Abu Dhabi, meanwhile, touted its own growth plans.
The war, which erupted in late February after the US and Israel attacked Iran, was cast by Washington as an effort to prevent Tehran from posing a threat because of its nuclear program. So far this year, Brent has surged about 77%.
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With assistance from Nathan Risser.
This article was generated from an automated news agency feed without modifications to text.
