Oil falls after Trump cancels attack on Iran to seek nuclear deal

Oil prices fell more than $4 a barrel on Monday after ‌US President Donald Trump held ‌off a fresh attack on Iran as he sought a quick deal that would halt Tehran's nuclear ambitions and reopen the Strait of Hormuz.

Brent crude futures fell $4.65, or 5.29%, to $83.28 by ‌0802 GMT while U.S. West Texas Intermediate crude was at $79.47 a barrel, down $5.20, or 6.14%.

Both ⁠contracts jumped more than 20% last month after fighting between the US and Iran resumed and attacks on several tankers around Oman heightened security concerns, deterring shippers from entering the Gulf to load oil. In a sign of de-escalation, Trump said late on Saturday on his Truth Social platform that Iran and other Middle Eastern countries had asked for time to ​complete a deal that would lead to "the Immediate, Complete and Total" reopening of ‌the Strait and "an end to Iran's nuclear threat".

Can a deal happen?

"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, potentially through an attack on a US base or a tanker transiting the waterway," IG market analyst ​Tony Sycamore said.

A ship off the port of Aden, where traffic remained steady after the Iran-aligned Houthis said their forces had carried out missile and drone strikes on Saudi oil tankers, in Aden, Yemen. File/Reuters

Two ‌tankers laden with Saudi oil crossed the Bab El Mandeb Strait out of the Red ‌Sea over the weekend while traffic in the Strait of Hormuz slowed following reports of vessel attacks, shipping data showed on Monday.

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

On Sunday, ‌the Organization of the Petroleum Exporting Countries and ⁠allies, known as OPEC+, approved an oil production quota increase of around ‌188,000 barrels per day from September, which would complete the producer group's unwinding of a layer of voluntary output cuts.

Export disruptions from the Gulf, Russia ⁠and Kazakhstan, caused by the Iran and Ukraine wars, have meant successive monthly OPEC+ ​hikes over most of this year have not translated into extra oil on the market and have had little impact on prices.

Reuters