Market reaction
Oil retreated in early Asian trade on Tuesday after U.S. President Donald Trump said he had delayed a planned military strike on Iran and that "serious negotiations" were underway. By 19:13 ET (23:13 GMT), West Texas Intermediate futures for July had fallen 1.8% to $102.47 a barrel, after opening the session more than 2% lower.
Drivers behind the move
Crude prices eased primarily following Mr. Trump's announcement that he had postponed an attack that had been scheduled for Tuesday. In his post, he said Gulf countries had asked him to stand down. He cautioned, however, that the United States would carry out a "full, large scale assault of Iran" if negotiations failed to produce an agreement, and he reiterated that Iran must not possess a nuclear weapon.
Sanctions waiver and supply mitigation
Adding to downward pressure on prices, the U.S. Treasury announced on Monday another 30-day extension of a sanctions waiver that allows the purchase of Russian seaborne oil. The waiver is intended to help offset supply disruptions stemming from the conflict in the Middle East, and the Treasury's decision reversed earlier plans not to extend the exemption.
Regional supply disruptions
Market participants remain focused on physical supply interruptions related to the Iran conflict. The Strait of Hormuz was still effectively closed, disrupting roughly 20% of global crude flows. A number of Asian countries, including major importers China and India, experienced interruptions to their oil supplies as a result of the hostilities.
Recent price context
Oil had climbed sharply over the preceding two weeks amid multiple reports that the United States and Israel were weighing additional military action against Iran. The latest sequence of developments - a postponed strike, continued negotiation signals, and a temporary extension of the Russian oil waiver - combined to pull prices lower in early Asian trading.
Note: The article reports market moves and official actions as stated by public announcements and government releases.