Iran Strike Pause Tests Oil Rally as Diplomacy Continues

The United States paused military strikes on Iran for a second consecutive day. Ambassador to the United Nations Mike Waltz said Sunday that Washington is giving diplomatic efforts more time while keeping its military posture in place.

“Trump is giving talks some space – he's giving it a little bit of room,” Waltz told Fox News. He stressed that the halt did not mean the U.S. was backing down. “The United States remains locked and loaded,” he said, adding that additional military assets had been moved into the region.

Waltz rejected reports that the U.S. military was limiting weapons use because of depleted supplies. On NBC's Meet the Press, he said he had “verified this every which way” and that the military “has everything that it needs to conduct this campaign as effectively as it needs to be.” He called the people leaking those reports “nonsense” who “deserve to be in jail.”

The pause follows nearly two weeks of U.S. strikes on Iranian coastal areas and infrastructure. Those were triggered by attacks linked to tensions around the Strait of Hormuz, one of the world's most important energy shipping routes. The Pentagon has not publicly explained why it stopped the bombing. The U.S. and Iran have both paused attacks as negotiators work toward an interim ceasefire deal.

Waltz said talks involving Iran, Oman and other representatives were continuing at multiple levels. “We've had both Oman and Iran, and a number of our other negotiators, engaged at every level, from the most senior levels all the way down to the technical level,” he said. The 60-day interim agreement signed in mid-June is in its later phase. Major issues including Iran's nuclear program remain unresolved.

Iran's Foreign Ministry spokesperson Esmail Baghaei said Tehran's talks with Oman on ensuring safe passage of ships had made progress. Iran maintained it has the right to manage shipping through the strait. The U.S. military said its naval blockade against Iran remained active, with several commercial vessels redirected or boarded.

Concerns have spread to the Bab al-Mandeb Strait, the waterway linking the Red Sea and the Gulf of Aden. Iran-backed Houthi rebels in Yemen recently threatened a blockade targeting Saudi-linked shipping, raising the risk of further disruption to global energy supplies. Oil prices have already climbed on the tensions. A simultaneous disruption at Hormuz and Bab al-Mandeb would put roughly 40% of the world's seaborne crude at risk, traders said. Read more: Oil Pierces $100 as US Strikes Iran From Caspian to Gulf.

Israeli Prime Minister Benjamin Netanyahu is scheduled to meet President Trump in Washington on Tuesday. Iran will be a central topic. Netanyahu said he supports Trump's efforts to pressure Tehran and prevent it from advancing its nuclear program. “I fully support Trump's efforts to weaken Iran and press it to end its nuclear program,” he told Fox News. “If he can do so without returning to intense military fighting, that's fine. Why not?”

Netanyahu said he planned to hear Trump's strategy rather than present new intelligence. “I think it's a good thing to have the opportunity to sit with our good friend President Trump and to hear what he has in mind, because I think in many ways it's his decision,” he said. He warned Iran against any future attacks on Israel, directly or through proxies. “If Iran attacks Israel, either directly or through proxies, it will make a terrible mistake.”

The White House and Pentagon have not commented on the talks or the timeline for a possible resumption of strikes. The Trump-Netanyahu meeting is scheduled for Tuesday.