Trump’s decision to halt strikes on Iran eases supply risks but uncertainty persists after Tehran rejects US claims of a deal request.
US President Donald Trump canceled planned strikes on Iranian energy infrastructure over the weekend, removing a near-term supply-side risk for oil markets. The reported bombing campaign could have disrupted crude flows through the Hormuz Strait, a critical chokepoint for global oil transit, potentially tightening supply and lifting prices.
Traders had priced in a geopolitical risk premium amid escalating tensions, but the stand-down may ease freight concerns and reduce volatility. However, Iran’s denial of requesting a pause introduces uncertainty, as markets await confirmation from both sides. Prior escalations in the region have triggered sharp price swings, with Hormuz disruptions historically adding $5-$10 per barrel to crude.
Sentiment remains fragile, with further military signaling or rhetoric from either side capable of reversing the move. Oil prices may stay rangebound until clarity emerges on the reported deal’s terms, including Hormuz access and Iran’s nuclear program.