Iran pauses attacks as Trump opens talks
Oil markets steadied on Monday as the United States and Iran announced a pause in their recent exchange of strikes, lifting a brief cloud of uncertainty over Gulf shipping routes.
Both sides call a temporary truce
Iran confirmed it had ceased retaliatory attacks against U.S. allies after a weekend in which American forces also halted their bombing campaign. The Iranian army spokesman Mohammad Akraminia said the pause came after “two nights of the Americans stopping their attacks.” In turn, U.S. Ambassador to the United Nations Mike Waltz told Fox News Sunday that while forces remained “locked and loaded,” President Donald Trump would “give talks a little bit of room.”
The ceasefire follows a stretch of 13 consecutive nights of U.S. strikes that began on July 24, marking the most intense phase of the conflict since an April ceasefire. Those attacks ended on Friday night, and Saturday passed without further bombing, creating a two‑day lull that both sides appear to be honoring.
Oil prices tumble as markets react
Brent crude futures fell $4.89, or 5.05%, to $91.89 by 0009 GMT, briefly slipping below the $90 support level. U.S. West Texas Intermediate settled at $84.64 a barrel, down $4.67, or 5.23%. Both benchmarks recorded their lowest values in nearly a week after three weeks of gains.
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The dollar also weakened against major currencies at the start of Asian trading. It slipped 0.2% against the yen, reaching 163.585 yen, its steepest decline since July 10. The euro rose 0.2% to $1.1397, and the British pound increased by a similar margin to $1.3353.
Shipping data from Kpler showed that vessel traffic through the Bab el‑Mandeb strait fell to eleven commodity ships on Sunday, the lowest level in months. Transit through the Strait of Hormuz also remained subdued over the weekend, reflecting lingering concerns despite the recent pause.
The Houthi movement, aligned with Tehran, has been targeting Saudi oil installations along the Red Sea coast, aiming to block Saudi exports and expand the broader U.S.–Iran confrontation that has already strained oil flows through the Hormuz corridor.
Analysts note that the temporary halt could provide a window for diplomatic initiatives, such as the China‑led talks in Pakistan that aim to revive stalled negotiations. The pause may also ease pressure on global oil supply, which has been volatile because of the ongoing conflict.
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One thing to keep in mind is that while the cessation of strikes is a positive sign, the underlying tensions remain. Both sides have kept forces on standby, and any misstep could quickly reignite hostilities.
In the broader context, the willingness to step back from direct attacks suggests a strategic calculation by both Washington and Tehran. For the United States, reducing military engagement may help preserve diplomatic flexibility and avoid further escalation that could draw in regional partners. For Iran, limiting retaliation signals a desire to avoid deeper confrontation while still maintaining leverage over its adversaries.
Despite the calm, shipping lanes remain cautious. The Red Sea corridor continues to face disruptions from Houthi activities, and the Hormuz strait, a critical conduit for global oil, has not returned to pre‑conflict traffic levels. Traders will likely watch closely for any indication that the pause extends beyond the weekend.
Market reaction highlights the sensitivity of oil prices to geopolitical shifts. The recent dip in crude prices reflects investor optimism that the pause could lead to renewed dialogue, but the fragile nature of the truce means that any reversal could quickly reverse the gains seen in early Asian trade.
