Oil prices declined by more than $4 a barrel (bbl) on 03 August after US President Donald Trump decided not to authorise a new attack on Iran, reported Reuters.
Trump stated he would postpone military action to pursue a swift agreement aimed at halting Tehran’s nuclear activities and reopening the Strait of Hormuz.
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By 10:11 GMT, Brent crude futures had dropped by $4.23, or 4.8%, to reach $83.70/bbl, while US West Texas Intermediate (WTI) crude had fallen by $5.07, or 6%, to $79.60/bbl.
Both benchmarks experienced their steepest daily declines in both absolute and percentage terms since the start of last week.
Last month, Brent and WTI crude prices increased by more than 20% following renewed tensions between the US and Iran and after several tanker attacks near Oman increased security concerns and deterred shipping through the Gulf.
Trump posted on Truth Social that Iran and other countries in the Middle East had requested time to work towards a deal enabling “the Immediate, Complete and Total” reopening of the Strait of Hormuz and aiming for “an end to Iran’s nuclear threat”.
The specifics of this possible agreement were not disclosed.
Shipping data indicated that two tankers carrying Saudi crude oil departed the Red Sea via the Bab el-Mandeb Strait over the weekend, but vessel movement in both the Strait of Hormuz and Bab el-Mandeb slowed.
Since Saturday, there have been three additional reported tanker attacks, according to the UK Maritime Trade Operations.
Meanwhile, the Organisation of the Petroleum Exporting Countries (Opec) and its allies (Opec+) approved an increase in oil production quotas of approximately 188,000 barrels per day (bpd) from September.
Seven Opec+ countries – Algeria, Iraq, Kazakhstan, Kuwait, Oman, Russia and Saudi Arabia – confirmed their decision at a virtual meeting, reaffirming their intention to continue supporting market stability and address compensation for any overproduced volumes since January 2024.
The group will reconvene on 6 September 2026 to review market conditions.
