Oil Plunges as Trump Rules Out Post-Election Iran Strike

The international oil market experienced its sharpest single-day decline in recorded history on Monday, falling seven percent to 104 dollars per barrel. The price drop occurred immediately after President Donald Trump stated the United States would not attack Iran following the upcoming midterm elections. This announcement coincided with new diplomatic signals from Tehran regarding a potential ceasefire.

Trump made his remarks during a speech at the Washington Reflecting Pool. He responded to a question from an NBC reporter by confirming there would be no immediate strikes. In a separate interview with Axios released the same day, the president said the US had crippled Iran financially and that there was no rush to resume military action. He claimed Iran was tired and wanted a settlement as soon as possible.

The timing of these comments arrived one day before US voters went to the polls to determine control of Congress. Polls indicated the Republican Party faced a severe setback due to rising prices, partly driven by the US-Israeli war on Iran. Many commentators suggested Trump aimed to calm voters with the news. Conservative podcast host Tucker Carlson had warned earlier in the week that Trump was weighing a nuclear bomb at the request of Israeli Prime Minister Benjamin Netanyahu. That warning garnered over 70 million views on X by Monday evening.

Iranian officials simultaneously pushed for a diplomatic resolution. Foreign Minister Abbas Araghchi told state media that consultations through mediators were intensive and depended on Washington's political rationality. The Iranian foreign ministry spokesperson, Esmaeil Baghaei, announced a seven-step proposal for a diplomatic solution that could be implemented in two days. The plan included the US ending its blockade on Iranian ports and waiving sanctions on Iranian oil sales. In return, Iran would reopen the Strait of Hormuz and begin talks on its nuclear program.

Qatari mediators have been shuttling between Doha and Iran in recent days, according to flight-tracking data and media reports. Iranian President Masoud Pezeshkian stated the government was working with these mediators to renew a truce. The US and Iran had agreed to a ceasefire in the spring and signed a 14-point memorandum of understanding. That agreement collapsed largely because Washington refused to allow Iran to control traffic in the Strait of Hormuz.

Trump asserted that oil prices would continue to fall because the United States was winning against Iran. He noted that the drop of ten dollars represented the biggest decline in oil history. Brent crude had rallied over the previous weeks in anticipation of resumed US-Israeli strikes on Iran. Experts and diplomats warned that Iran would likely retaliate against any attack by launching strikes across the Gulf region. The current diplomatic track seeks to avoid that scenario through the proposed seven-step framework.