Oil prices dropped as Trump says he'll hold off strikes, citing progress on a Hormuz deal. Energy stocks and shipping rates face pressure from the de-escalation. The Saudi defense minister was in Washington for talks.
President Donald Trump said Saturday he would hold off on ordering new strikes against Iran, claiming Mideast allies have reached the outlines of a deal to open the Strait of Hormuz and end Iran’s nuclear threat. Oil prices dropped on the news, and energy stocks came under pressure in early trading Monday as traders priced in a lower risk premium for crude supply.
Trump said in a social media post that the emerging agreement “would include the Immediate, Complete, and Total OPENING OF THE HORMUZ STRAIT, and an end to Iran’s nuclear threat.” He added that Israel has agreed to join the U.S. in trying to complete the deal. The president said he canceled the attack “subject to being able to rapidly make a DEAL.”
The announcement followed a phone call between Trump and Saudi Crown Prince Mohammed bin Salman, who raised concerns about a potential U.S. escalation, a person familiar with the discussion said. The Saudis worry that if the U.S. targets Iran’s energy or other key infrastructure, Tehran could retaliate against Gulf energy facilities, the person added. Saudi Arabia had joined the U.S. in striking Iranian-backed militia sites in Iraq earlier this week but has pushed for a return to negotiations.
Crude oil futures fell more than 2% in early Asian trading Monday, retracing some of the gains that followed the initial U.S. strikes last week. The S&P 500 energy sector also declined, with shares of Exxon Mobil and Chevron down as traders rotated out of oil-exposed names. Airlines and shipping stocks, by contrast, rallied on expectations of lower fuel costs and a reopening of the Hormuz waterway.
The five-month conflict has jolted global markets just months before U.S. midterm elections. Trump had told reporters Friday he would hit Iran “very hard,” and White House press secretary Karoline Leavitt expressed frustration that Tehran broke a truce memorandum. The State Department on Saturday issued security alerts for 10 countries in the region, warning U.S. citizens of possible flight cancellations and airspace closures.
Saudi Defense Minister Khalid bin Salman visited Washington earlier this week for separate talks with Trump and Vice President JD Vance on Iran strategy.
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