Oil Declines After Trump Says He Called Off Strike on Iran

• Oil prices declined on Monday, May 18, 2026, after U.S. President Donald Trump said he had called off a planned military strike on Iran for Tuesday, May 19, 2026, following appeals from Persian Gulf allies, including Saudi Arabia, Qatar and the United Arab Emirates.
• Brent dropped below US$110 per barrel, after gaining 2.6% on Monday, while West Texas Intermediate (WTI) for July traded below US$103, as markets reacted to signs that immediate military escalation may be delayed.
• According to President Trump, Gulf leaders asked the U.S. to hold off on the attack because “serious negotiations” with Iran were taking place. However, he also warned that the U.S. remains prepared to strike if an acceptable deal is not reached.
• A US naval blockade has left Iran’s Kharg Island oil terminal idle for at least 10 days, cutting off Tehran’s petroleum revenues and withdrawing millions of barrels from the market. This is a reversal for the Islamic Republic, which had been the strait’s dominant crude exporter after barring other nations’ vessels from the waterway in the opening weeks of the war.
• Oil prices remain highly sensitive to the negotiation outlook, as the near-total closure of the Strait of Hormuz continues to threaten Persian Gulf energy supplies and keep supply risks elevated. Markets also weighed reports that Washington had proposed a temporary waiver on Iranian oil sanctions, although a U.S. official denied the report. Separately, the U.S. issued a new waiver allowing the sale of Russian crude and petroleum products already loaded on tankers.
• The pullback in oil reflects temporary relief from avoided military action, but prices remain structurally supported by disrupted supply, uncertainty around Hormuz, and unresolved U.S.-Iran negotiations.

(Source: Yahoo Finance)