Oil Prices Tumble as US Halts Iran Bombing; Tehran Rejects Talks, Asserts Hormuz Control

The United States has suspended a two-week bombing campaign in Iran, prompting a significant drop in global oil prices on hopes of de-escalation. However, Tehran on Monday rejected the idea of resuming peace talks and asserted its continued control over the strategic Strait of Hormuz, signaling that underlying tensions in the key energy chokepoint remain unresolved.

Oil Prices Retreat on De-escalation

The halt in military action provided immediate relief to energy markets concerned about supply disruptions. Brent crude, the international benchmark, tumbled approximately 7.8% by mid-morning Monday, trading just under $90 a barrel. The decline follows a surge last week that briefly pushed prices above $100 a barrel for the first time since May, according to market data.

The reversal reflects investor optimism that the pause in hostilities could allow for the resumption of secure passage through the Strait of Hormuz, one of the world's most critical waterways for oil shipments.

Military Campaign Halted, Diplomacy Stalls

The U.S. suspended its bombing campaign over the weekend following 13 consecutive nights of strikes. The decision was based on advice from senior military commanders who believed the operation had reached its effective limits, a U.S. official told Reuters. The official noted that the chairman of the Joint Chiefs of Staff, General Dan Caine, had also raised concerns over the depletion of air defense systems protecting U.S. bases in the region. This assessment was also reported by The New York Times, CNN, and other outlets.

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While the U.S. ambassador to the United Nations, Mike Waltz, framed the pause as an opening for negotiations, Iran's Foreign Ministry spokesperson, Esmail Baghaei, dismissed the notion. In a televised press conference, Baghaei stated that Iran had not requested a resumption of peace talks. Iran has said it will pause its retaliatory attacks on U.S. bases as long as the American bombing halt continues.

Strait of Hormuz Remains a Flashpoint

In a move to underscore that the U.S. military action had not altered the strategic situation, Tehran signaled it remains in command of the strait. Citing an "informed source," several Iranian state media outlets reported on Monday that Iranian forces had turned back six "offending ships" that attempted to cross the waterway without permission.

The core of the dispute is control over shipping lanes. The U.S. has encouraged vessels to use a route near the coast of Oman, while Iran insists ships may only pass through a channel closer to its own coast, where it intends to supervise transit and potentially impose fees. The recent conflict saw scores killed in Iran and four U.S. service members killed by Iranian return fire, according to reports.