Oil slumps as Trump holds off Iran attack as talks to resume
Brent for October falls up to 7.3% to US$81.55 a barrel
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[TOKYO] Oil fell after US President Donald Trump said new talks with Iran would begin on Monday (Aug 3) after he called off a planned attack on the Islamic Republic.
Brent for October fell as much as 7.3 per cent to US$81.55 a barrel, after futures surged almost a quarter in July, their biggest monthly gain since March.
West Texas Intermediate was near US$80. Trump said on Sunday on Air Force One that he called off a massive attack on Iran after allies in the Middle East, including Saudi Arabia, asked him to pursue a deal instead.
Trump said he had agreed to cancel the attack, “subject to being able to rapidly make a DEAL” to quickly reopen the Strait of Hormuz, according to an earlier post on Truth Social.
“Get to work, everybody, and get it DONE.”
Brent swung through a roughly US$32 range in July as fighting resumed following the collapse of a June truce.
That saw the conflict spreading to the Red Sea and Jordan before another pause in late July to allow diplomatic efforts to continue was shattered.
The prospect for shipping to resume through Hormuz – which carried about a fifth of the world’s crude oil and liquefied natural gas (LNG) in peace time – remains uncertain.
An LNG tanker carrying a shipment from Qatar was struck by a projectile while transiting the waterway late last week.
European natural gas futures fell as much as 6.3 per cent in early Asian trading.
Iranian Foreign Minister Abbas Araghchi said on Sunday on Telegram that negotiations between Iran and Oman are in the final stages.
The two countries that flank the strait are discussing a new route through it, but the talks do not cover whether the waterway will be closed or open, Araghchi spokesman Esmail Baghaei said in an interview on Iranian state-run TV.
Elsewhere, major Opec+ nations approved the latest small increase to their production quotas, a move that will complete the theoretical revival of supplies halted in 2023 and give them scope to add more barrels once the Middle East war ends. BLOOMBERG
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