Oil prices moved lower on Thursday after U.S. President Donald Trump announced he had called off planned military strikes against Iran, a decision he said followed progress in talks involving Iran’s top leadership and a broad coalition of regional powers. The announcement coincided with a notable decline in crude benchmarks.
By 2:38 p.m. EDT (1838 GMT), Brent futures were down $2.50, or 2.7%, at $90.60 a barrel. U.S. West Texas Intermediate (WTI) crude fell $2.32, or 2.6%, to settle at $87.71 a barrel.
In a social media post, President Trump said he had halted the planned strikes because discussions had advanced to the highest levels of Iran’s leadership and because the measures had been approved by a broad coalition of regional powers. He did not provide further details about the specific points he said the coalition had approved. Iran has not issued a response to the president’s post.
The president has previously indicated that a deal with Iran was close on multiple occasions and has at times followed those statements with renewed threats when Tehran did not meet his conditions. Earlier on Thursday he had warned that the United States could hit Iran "very hard".
Despite the president’s cancellation, both Iranian sources and Western officials had indicated that indirect talks toward a preliminary peace agreement had been intensifying.
Separately, tensions around the Strait of Hormuz continued to shape market dynamics. On Wednesday, Iran announced the closure of the Strait of Hormuz, including to oil tankers and commercial ships, and warned that any vessel attempting to transit would come under fire. The waterway handles roughly 20% of global oil and gas shipments, making actions that affect its accessibility a pivotal driver of price volatility.
The Iranian closure was said to be in response to attacks at the end of February that targeted Iran and were attributed to U.S. and Israeli forces; those prior events had contributed to an earlier surge in oil prices. On Wednesday the U.S. military posted on X that commercial vessels continued to transit in and out of the strait and that no U.S. warships had been struck in the waterway. Iran’s state media, however, reported that U.S. ships in the vicinity had been targeted by missiles and drones.
Market participants were also monitoring movements of liquefied natural gas (LNG) carriers. LSEG and Kpler data showed that three additional LNG tankers had slipped out of the strait with their transponders turned off and were heading toward Asia, although the timing of their departures was unclear.
Regional incidents included a report from India of an incident involving a vessel off the Port of Shinas in Oman earlier on Thursday, the third such incident reported during the week. Indian refiners told market contacts that they have secured sufficient crude supplies to meet their requirements through at least August.
Inventory data added another element to the market picture. The U.S. Energy Information Administration reported that U.S. crude inventories fell by 7.2 million barrels to 426.5 million in the week ended June 5. That draw exceeded analysts’ expectations in a Reuters poll, which had forecast a decline of 4 million barrels.
The combination of geopolitical signals, maritime activity in the Strait of Hormuz, and a larger-than-expected U.S. crude draw helped shape the market reaction to the president’s cancellation of strikes. While the cancellation reduced the immediate prospect of a U.S. military response, shipping disruptions and unresolved diplomatic details left oil markets sensitive to further developments.