Oil prices fell more than 2% in early Asian trade Tuesday after President Trump said he paused a planned attack on Iran to allow negotiations to end the Middle East war.
Brent crude for July delivery dropped $3.01 to $109.09 a barrel, while U.S. West Texas Intermediate for June fell $1.38 to $107.28. The most active July WTI contract fell 2% to $102.32.
Trump said Monday there is a "very good chance" the U.S. can reach an agreement with Iran to prevent Tehran from obtaining a nuclear weapon. This followed his announcement of a pause in military action.
KCM Trade's Tim Waterer noted the market is watching for a genuine shift toward de-escalation or just a tactical pause. The Strait of Hormuz remains effectively closed, carrying about a fifth of global oil supply.
Iran confirmed its position was conveyed via Pakistan, with slow progress reported. Separately, the Treasury extended a sanctions waiver for Russian oil purchases.
U.S. crude inventories dropped to 374 million barrels, the lowest since July 2024, while the IEA warns commercial oil supplies are falling rapidly.