Oil Sinks Nearly 5% as Trump Calls Off Iran Strike to Pursue Hormuz Deal

Crude oil tumbled in early trading Monday after President Trump said he called off a planned military strike against Iran and will instead open fresh negotiations aimed at ending the Middle East conflict and reopening the Strait of Hormuz. Brent for September delivery fell 4.69% to $83.81 while West Texas Intermediate dropped 4.67% to $80.72, unwinding part of the war premium that has whipsawed energy markets since the conflict began in late February.

The de-escalation lifted the broader market. Futures on the S&P 500 and Nasdaq-100 rose about 0.5% and Dow futures gained 0.6% heading into the open, while Treasurys rallied and yields eased from recent highs near 4.7% to 4.8% on the 10-year. Trump reportedly paused the strike after appeals from Saudi Arabia, the UAE, Qatar and Iran, with talks set to begin Monday.

Falling crude cuts both ways for investors: energy producers such as Chevron and BP face pressure on realized prices after a strong earnings stretch, while fuel-sensitive names including Delta and American Airlines stand to benefit from lower jet fuel costs if the pullback holds.