NEW YORK: Oil prices fell sharply on Thursday after US President Donald Trump said he had cancelled planned military strikes on Iran and suggested progress in negotiations that could lead to a deal between Washington and Tehran.
Brent crude and US West Texas Intermediate (WTI) both dropped more than 3% in volatile trading, while equities surged and energy markets reacted to signs of a possible de-escalation in tensions.
Crude oil prices fell after Trump said he had called off imminent military strikes against Iran.
“Based on the fact that discussions with the Islamic Republic of Iran have been brought to the highest level of Iranian leadership and approved, I have… cancelled the scheduled strikes and bombings against Iran this evening,” Trump said in a post on his Truth Social platform.
He said discussions and final points had been “approved in both concept and great detail” by all parties involved, including the United States, Iran, Israel, Saudi Arabia, the United Arab Emirates, Qatar, Turkiye, Pakistan, Bahrain, Kuwait, Jordan, Egypt and others.
Trump added that a US naval blockade would remain in force “in full force and effect” until the transaction was finalised.
Oil slides as markets price in de-escalation
At around 1750 GMT, Brent crude was down more than 3%, while WTI also fell sharply, according to market data cited in trading reports.
Earlier, Brent had fallen as much as 3.9% to $89.46 a barrel, its lowest level since mid-April, while WTI was down 3.6% at $86.75 a barrel.
The decline followed earlier gains when Trump had threatened strikes and warned of possible US moves to take control of Iranian oil infrastructure, including Kharg Island, a key export hub.
Trump had earlier on Thursday warned of imminent military strikes and said the United States would take control of Iran’s oil and gas markets, including strategic infrastructure points.
However, he later posted a more conciliatory message indicating progress in talks and the cancellation of strikes.
The shifting messages added volatility to energy markets already sensitive to developments in the Iran conflict and possible disruption to Middle East supply routes.
Markets react across assets
Equity markets rose in response to easing geopolitical risk. The Dow Jones Industrial Average was up 1.7% at 50,753.64, according to trading data cited in market reports.
European natural gas futures also fell as much as 4%, tracking the decline in oil prices.
The Strait of Hormuz, a key global energy chokepoint, had previously been under intense focus due to conflict-related disruptions affecting regional shipping flows.
Trump had previously said more than 100 million barrels had passed through the Strait of Hormuz during a secret US maritime support operation, helping stabilise flows.
