Crude oil fell more than 4% in Asian trading on Monday after President Donald Trump called off a planned military strike on Iran and said new negotiations would begin the same afternoon. The selloff erased a geopolitical risk premium that had accumulated over weeks of escalating tension around the Strait of Hormuz.
West Texas Intermediate for September delivery dropped 4.5% to $80.89 a barrel, while Brent for October delivery declined 4.4% to $84.10. Both benchmarks moved in near lockstep, confirming the driver was geopolitical rather than supply-specific. The decline concentrated in Asia-Pacific hours as algorithmic systems reacted to the overnight headline.
Trump announced the decision on Truth Social late Saturday, writing that Iran and several Middle Eastern countries had asked him to hold off because the "perimeters of a deal" had been reached. He said the agreement would include the "Immediate, Complete, and Total OPENING OF THE HORMUZ STRAIT, and an end to Iran's nuclear threat." On Sunday, aboard Air Force One, he told reporters the canceled operation would have been "the biggest attack since World War II" and identified Saudi Arabia, the United Arab Emirates, and Qatar as the allies who urged restraint.