Global oil prices declined on Thursday after United States President Donald Trump indicated that diplomatic efforts with Iran had progressed, easing fears of a wider military confrontation between the two countries.
The fall came after a period of market uncertainty triggered by renewed clashes between the US and Iran and Trump’s earlier warning of possible additional strikes, raising concerns that tensions could escalate into a broader regional conflict.
Reports indicated that crude markets reacted quickly to Trump’s change in tone, with Brent crude, the international benchmark, dropping more than three per cent to trade below $90 per barrel. Brent stood at about $89.99 per barrel by 7:30 p.m. Nigerian time.
West Texas Intermediate (WTI), the US crude benchmark, also declined by more than three per cent, hovering around $87 per barrel.
Investors have remained focused on developments around the Strait of Hormuz, a critical shipping route between Iran and Oman that handles a significant portion of global oil and gas supplies.
Despite recent military tensions, oil prices had not experienced major spikes in recent days, even after reports of a US military helicopter incident near the strategic waterway.
Trump, in a post on Truth Social, said he had halted planned attacks on Iran after receiving assurances that talks had reached senior levels of Iran’s leadership.
“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.
The President added that the discussions involved the United States, Israel, Saudi Arabia, the United Arab Emirates, Qatar, Turkey, Pakistan, Bahrain, Kuwait, Jordan, Egypt and other countries.
He, however, noted that the naval blockade around Iran would remain in place until a final agreement is concluded.
“The naval blockade will remain in full force and effect until this transaction is finalised,” Trump said, adding that details of the agreement would be announced later.
Analysts said markets would continue monitoring whether the diplomatic breakthrough results in a lasting reduction in tensions or whether disruptions around key energy routes persist.