Oil drops over 5% as Middle East tensions ebb on diplomatic efforts

Oil prices fell Monday in Asia trading as investors pared geopolitical risk premiums after U.S. President Donald Trump said he had called off a planned strike on Iran .

West Texas Intermediate futures for September delivery declined nearly 6% to $79.57 per barrel as of 3:33 a.m. ET. Brent crude futures for October delivery lost 4.88% to $83.64 a barrel.

Trump said early Sunday that he had called off a planned strike on Iran after receiving a request from Tehran and other countries in the Middle East.

"We have just been asked by Iran, and other Middle Eastern Countries, to hold off any attack in that the perimeters of a deal has been agreed to," Trump said in a Truth Social post.

He said the proposed agreement would include the "Immediate, Complete, and Total OPENING OF THE HORMUZ STRAIT, and an end to Iran's nuclear threat."

Trump has reportedly been weighing another round of strikes on Iran amid fading prospects for a diplomatic resolution to the conflict, which began on Feb. 28.

Tehran responded cautiously to Trump's announcement.

"Although the enemy's recent statements are part of a psychological and cognitive warfare campaign, we consider every threat to be real and take it seriously," said Seyyed Majid Ibn Al-Reza, Iran's acting defense minister, according to a state media post on X.

Iran's Fars International news agency, which is affiliated with the Islamic Revolutionary Guard Corps, dismissed Trump's proposal, saying in a Telegram post on Sunday that his demands amounted to a "wish list."

— CNBC's Azhar Sukri and Terri Cullen contributed to this report.

Got a confidential news tip? We want to hear from you.

Get this delivered to your inbox, and more info about our products and services.

Data is a real-time snapshot *Data is delayed at least 15 minutes. Global Business and Financial News, Stock Quotes, and Market Data and Analysis.

Indexed and credited by AIPROPX. Originating outlet: CNBC. Open at source →