Oil prices drop 7% to three-week low after Trump cancels attack on Iran
A vessel in the Strait of Hormuz, as seen from Musandam, Oman, July 31, 2026. REUTERS/Stringer
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NEW YORK, Aug 3 : Oil prices fell about 7 per cent to a three-week low on Monday after U.S. President Donald Trump held off on a fresh attack on Iran in the hope of sealing a quick deal that could boost oil supplies from the Gulf.
Front-month Brent futures fell $6.35, or 7.0 per cent, to settle at $83.77 a barrel, while U.S. West Texas Intermediate (WTI) crude fell $4.33, or 5.1 per cent, to settle at $80.34.
That was the lowest close for Brent since July 13, due in part to the start of the less expensive October futures as the front-month after the more expensive September contract expired on Friday. Brent prices for October were down 4.7 per cent from where the October contract closed on Friday.
Iran said on Monday there were no talks under way with the United States and no plans for any meetings, contradicting Trump who had cited talks he said would take place that afternoon as justification for calling off attacks.
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Over the weekend, Trump repeated a pattern that has emerged throughout the past five months: announcing plans for “massive attacks” on Iran, only to cancel them at the last minute.
Trump on Monday said talks with Iran “are going on right now”, adding that Iran faced “decapitation” if Tehran did not agree to a pact to end the conflict.
Iran’s Foreign Ministry spokesman Esmail Baghaei rejected the claim, saying no negotiations with the United States were taking place and no meetings were scheduled. Iran had no plans to host foreign delegations or send negotiators abroad in the coming days, he said.
“Today’s sharp selloff … in crude futures looks like another overreaction to Trump’s comments that a deal with Iran is imminent following his weekend threats of massive attacks that were also suggested as imminent,” analysts at energy advisory firm Ritterbusch and Associates said in a note.
“Trump is continuing a pattern of occasionally talking the oil market lower in precluding a sustained advance in gasoline prices,” the Ritterbusch analysts said.
On Monday, Trump again called on oil companies to lower gasoline prices for U.S. consumers, chiding Chevron and Exxon Mobil for making too much money.
In addition to the drop in crude futures, prices for both U.S. gasoline and diesel fell by around 5 per cent during Monday’s session.
SHIPS CHANGE COURSE
Six Saudi-flagged supertankers have changed course in the Gulf of Aden in recent days and are heading to southern Africa following threats by the Iran-backed Houthi movement in Yemen to target Saudi shipping, tracking data showed on Monday.
Over the weekend, however, two tankers laden with Saudi oil crossed the Bab el-Mandeb Strait between the Red Sea and the Gulf of Aden, while traffic in the Strait of Hormuz between Iran and Oman slowed following reports of vessel attacks, shipping data showed on Monday.
About a fifth of the world’s oil passed through the Strait of Hormuz before the U.S. and Israel started bombing Iran on February 28.
RUSSIAN ENERGY ON THE MOVE
A Panama-flagged tanker carrying Russian naphtha attempted to pass through the Bab-el-Mandeb in the last week of July before changing course to sail around Africa instead, trade sources said and shipping data from LSEG showed.
Russia said on Monday it was stepping up protection of ships in the Azov-Black Sea basin while also developing alternative cargo routes, in a move that follows a sharp escalation of attacks at sea by both sides in the war in Ukraine.
Russia was the world’s third-biggest crude oil producer behind the U.S. and Saudi Arabia in 2025, according to U.S. energy data, and is a member of the OPEC+ group of countries, which includes the Organization of the Petroleum Exporting Countries (OPEC) and allies.
Export disruptions from the Gulf, Russia and Kazakhstan, caused by the Iran and Ukraine wars, have meant successive monthly OPEC+ hikes over most of this year have not translated into extra oil on the market.
On Sunday, OPEC+ approved an oil production quota increase of around 188,000 barrels per day from September.
Source: Reuters
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