Key facts
- Oil prices fell after Iran and Israel announced a halt to attacks on each other.
- Iran and Israel warned they could resume hostilities if provoked.
- Iran's ambassador to Moscow stated the Strait of Hormuz will remain open with new conditions and transit fees set by Iran and Oman.
- Yemen's Houthis announced a ban on Israeli shipping in the Red Sea.
- U.S. President Donald Trump appealed for an immediate halt to hostilities.
Oil prices fell on Tuesday, erasing most of the previous session's gains, after Iran and Israel announced they had halted attacks on each other following an appeal from U.S. President Donald Trump. Brent crude futures declined 1% to $93.34 a barrel, while U.S. West Texas Intermediate (WTI) futures fell 1.2% to $90.17 a barrel.
Prices had climbed as much as 5% in the prior session amid renewed Israeli strikes on Iran and attacks in Lebanon, which had reduced hopes for an imminent end to the wider conflict. However, gains were pared after Iran's armed forces announced the end of military operations against Israel. Investors remain cautious, with analysts suggesting the truce may be temporary and a lasting peace deal elusive.
Adding to maritime concerns, Iran's ambassador to Moscow, Kazem Jalali, stated that the Strait of Hormuz will remain open but with new conditions and transit fees set by Iran and Oman. This statement comes as the U.S. has previously warned Oman against imposing tolls on ships using the vital waterway. Concurrently, Yemen's Iran-aligned Houthis declared a ban on Israeli shipping in the Red Sea, escalating threats to crucial global trade routes. Previous Houthi attacks had already prompted major shipping companies to divert vessels, impacting oil and LNG flows.
Both Iran and Israel warned they could resume hostilities. Israeli Prime Minister Benjamin Netanyahu stated Israel would respond with force if Iran attacked again, while Tehran indicated it would resume strikes if Israel continued to target Hezbollah in Lebanon. U.S. President Trump had warned Netanyahu that he might find himself fighting alone if he resumed war with Iran.