Oil Plunges 14% to $89 After Trump Delays Iran Strikes, Talks Loom
Oil plunged 14% intraday to $89 a barrel after Trump delayed strikes on Iranian power plants and raised chance of a deal within days. The Hormuz blockade has halted about 20% of global oil and LNG flows, triggering emergency reserve releases and record intraday volatility.
1. Intraday Price Collapse
WTI crude tumbled as much as 14% to $89 per barrel, marking one of the largest single-session drops on record. Prices later recovered some losses but maintained significant downward pressure as traders reacted to geopolitical developments.
2. Diplomatic Signals
President Trump postponed planned strikes on Iranian power plants and indicated that negotiations could produce a deal within days, though Iranian officials denied any direct talks. Public statements raised hopes of de-escalation in the Middle East.
3. Strait of Hormuz Disruption
The effective blockade of the Strait of Hormuz has obstructed roughly 20% of global oil and LNG shipments, intensifying supply concerns. Market participants have grappled with heightened uncertainty over when normal transit might resume.
4. Policy Responses
In response to the supply shock, the US has released emergency reserves and waived sanctions on select Iranian and Russian barrels to bolster market liquidity. These measures aim to cushion the dramatic price swings and stabilize energy markets.