Oil Prices Drop as Trump Pauses Iran Attack

PHOTO CAPTION: A vessel in the Strait of Hormuz, as seen from Musandam, Oman, July 31, 2026. REUTERS/Stringer

LONDON, Aug. 3 — Oil prices fell more than $4 a barrel Monday after President Donald Trump held off a new attack on Iran while seeking a rapid agreement to curb Tehran’s nuclear ambitions and reopen the Strait of Hormuz.

Brent crude futures fell $4.23, or 4.8%, to $83.70 a barrel by 1011 GMT after recovering some ground from a three-week low reached earlier in the session.

U.S. West Texas Intermediate crude fell $5.07, or 6%, to $79.60 a barrel.

Both benchmarks recorded their largest daily declines in absolute and percentage terms since the previous Monday.

Oil prices had risen more than 20% in July after fighting between the United States and Iran resumed and attacks on tankers near Oman heightened security concerns.

Those attacks discouraged shipping companies from entering the Gulf to load oil.

In a sign of possible de-escalation, Trump said Saturday on Truth Social that Iran and other Middle Eastern countries had requested more time to complete an agreement.

Trump said the proposed deal would lead to the “Immediate, Complete and Total” reopening of the Strait of Hormuz and “an end to Iran’s nuclear threat.”

Details of the potential agreement remained unclear.

Questions remain over a possible deal

Tony Sycamore, a market analyst at IG, said the central question was whether expectations of an agreement would collapse as they had the previous week.

“The bigger focus is whether this week turns into a rinse and repeat of last week — with hopes of a deal collapsing as Iran digs in its heels and continues to leverage its control over the Strait,” Sycamore said.

Two tankers carrying Saudi oil crossed the Bab el-Mandeb Strait from the Red Sea over the weekend, shipping data showed.

Traffic slowed in both the Strait of Hormuz and Bab el-Mandeb.

The United Kingdom Maritime Trade Operations reported three additional tanker attacks since Saturday.

OPEC+ approves production increase

OPEC and its allies, collectively known as OPEC+, approved an increase in oil production quotas of about 188,000 barrels per day beginning in September.

However, disruptions to Gulf, Russian and Kazakh exports caused by the Iran and Ukraine wars have limited the effect of previous monthly production increases.

As a result, those quota increases have not consistently produced additional oil supplies or significantly reduced prices.

(Source: Reuters)