Key facts
- WTI crude futures fell over 5% to $80.34/barrel.
- President Donald Trump cancelled planned US military strikes against Iran.
- Trump stated that talks with Iran are ongoing, despite denials from Tehran.
- OPEC+ agreed to boost production targets by 188,000 b/d starting in September.
- Oil and gas exports through the Strait of Hormuz have plummeted since February.
- Nymex RBOB gasoline futures fell 25.49¢/USG to $2.9667/USG.
Benchmark WTI crude futures fell by more than 5% to $80.34/barrel after President Donald Trump announced the cancellation of planned US military strikes against Iran, insisting that talks with Tehran were ongoing despite denials from the nation. September Nymex WTI fell by $4.33/bl to $80.34/bl, while October Ice Brent fell by $4.16/bl to $83.77/bl, widening the October Brent-October WTI spread to $5.87/bl.
Trump stated on Sunday that he cancelled the assault citing progress on a deal and that talks would begin Monday afternoon. However, Iran's foreign ministry denied holding talks with the US, noting that Iran and Oman are negotiating a safe shipping route through Hormuz. Trump later told reporters that talks were "going on right now" but acknowledged Iran's denial.
Oil and gas exports through the Strait of Hormuz have plummeted since the start of the US-Iran war on February 28. An interim peace deal in mid-June collapsed in early July due to disagreements over control of the strait, leading to weeks of military attacks.
Meanwhile, the OPEC+ core group agreed on Sunday to raise collective production targets by a further 188,000 b/d starting in September, completing the phased unwinding of voluntary production cuts. The seven countries participating in these cuts reiterated their commitment to compensate for past overproduction, though quota increases have not translated into additional physical supply due to disruptions from the US-Iran conflict.
Separately, Kazakhstan's energy ministry denied media reports of a possible complete shutdown of the Caspian Pipeline Consortium (CPC) system, stating that "This scenario is not being considered."
Nymex RBOB gasoline futures fell by 25.49¢/USG to $2.9667/USG, and Nymex ultra-low sulphur diesel fell by 24.43¢/USG to $3.8772/USG.