Oil prices declined in Asian trading on Tuesday after former U.S. President Donald Trump announced a temporary halt to a U.S. maritime security initiative in the Strait of Hormuz, fueling optimism about a possible diplomatic breakthrough with Iran.
Brent crude, the global oil benchmark, dropped by 1.7 percent to $108 per barrel, while U.S. crude futures fell 1.6 percent to $100.60. The decline follows a volatile start to the week, during which prices surged more than six percent amid rising geopolitical tensions in the Middle East.
The Strait of Hormuz remains one of the world’s most critical energy corridors, accounting for nearly 20 percent of global oil and gas shipments.
Trump said Washington would pause “Project Freedom,” a naval operation designed to escort commercial vessels through the strait, to create room for renewed negotiations with Iran. In a social media statement, he noted that “great progress” had been made toward a potential agreement, although broader restrictions on Iranian ports would remain in place.
Analysts say the move signals a possible shift toward diplomacy but warn that uncertainty persists. Charu Chanana, an investment strategist at Saxo Bank, said the pause reflects a willingness to reopen dialogue, though tangible progress on ensuring safe passage through the strait remains limited.
Meanwhile, U.S. Secretary of State Marco Rubio indicated that the initial phase of joint U.S.-Israeli military operations against Iran had concluded, with key objectives reportedly achieved.
Despite the diplomatic signals, tensions in the region remain elevated. Iran has warned it could target vessels in retaliation for earlier strikes, while recent incidents involving ships and infrastructure continue to raise concerns about potential disruptions to global energy supplies.
