Oil prices fall after Trump pauses Iran strike for talks

Oil prices fell in early Asian trading on Tuesday, May 19, after US President Donald Trump announced a pause in a planned attack on Iran to allow time for negotiations aimed at ending the conflict in the Middle East.

Brent crude futures for July delivery dropped $2.26, or 2 per cent, to $109.84 per barrel. US West Texas Intermediate (WTI) crude for June delivery fell $1.22, or 1.1 per cent, to $107.44 per barrel. The more active July WTI contract declined $1.63, or 1.6 per cent, to $102.75.

In the previous session, both benchmarks had surged to their highest levels since May 5 for Brent and April 30 for WTI. The June WTI contract is set to expire on Tuesday.

Trump said on Monday there was a “very good chance” the United States could reach an agreement with Iran to prevent it from obtaining a nuclear weapon, hours after announcing the pause in military action.

“While Trump‘s signal has eased some immediate pressure, the fundamental risks persist … The market is now watching whether Trump‘s comments represent a genuine shift toward de-escalation or just a tactical pause,” said Tim Waterer, chief market analyst at KCM Trade.

“Also, how Iran responds to the latest developments, and what’s actually happening on the water with tanker movements through the Strait of Hormuz are key determinants of where oil prices head to from here.”

Despite the price decline, concerns remain elevated as the Middle East conflict has effectively closed the Strait of Hormuz, a vital route that carries around one-fifth of global oil and liquefied natural gas supplies.

Iranian Foreign Ministry spokesperson Esmaeil Baghaei confirmed that Tehran had communicated its position to Washington via Pakistan, without providing details.

ING analysts noted, “One might think the oil market would become increasingly numb to these headlines. However, the scale of supply disruptions is significant and growing more concerning each day that oil flows remain halted.”

Separately, Iran’s Tasnim news agency reported that the US had agreed to waive sanctions on Iranian oil exports during negotiations, though a US official denied the claim.

In parallel, US Treasury Secretary Scott Bessent extended a 30-day waiver allowing energy-vulnerable countries to continue purchasing Russian seaborne oil.

In the United States, 9.9 million barrels were withdrawn from the Strategic Petroleum Reserve last week, reducing stockpiles to about 374 million barrels, the lowest level since July 2024. Analysts surveyed by Reuters estimate US crude inventories fell by about 3.4 million barrels in the week ending May 15, with official data due on May 20.

By Tamilla Hasanova