Oil prices fell sharply on Tuesday, with Brent crude for July delivery dropping by $3.01, or 2.7%, to $109.09 per barrel, after US President Donald Trump said that a planned attack on Iran had been paused to allow talks aimed at ending the Middle East conflict.
Trump made the announcement during a press conference, stating that military action was on hold while diplomatic channels were explored. The comments eased fears of an immediate supply disruption from the region, leading to the decline in crude prices.
Analysts noted that the market had been pricing in a risk premium due to tensions in the Middle East, and Trump's remarks reduced that premium temporarily. However, some cautioned that the situation remains volatile and prices could rebound if talks fail.
The drop in oil prices also impacted energy stocks, with major oil companies seeing declines in early trading. The broader market showed mixed results as investors weighed the implications of potential de-escalation versus ongoing geopolitical risks.
