Brent Slides to $111 as Trump Pauses Iran Strike

Crude prices retreated on Tuesday afternoon after President Donald Trump confirmed he had called off a planned military strike on Iran following appeals from Persian Gulf leaders. Brent crude was trading near $111 per barrel on ICE in afternoon trading as of approximately 13:00 MT, while WTI front-month futures on the CME were near $103 per barrel, according to data tracked by Oilprice.com and Trading Economics. Both benchmarks gave back recent gains as traders priced in a higher probability that the United States and Iran would reach a framework agreement to end the war that began earlier in May.

Gulf Leaders Push Back on Tuesday Strike Plan

Trump told reporters he had instructed the Pentagon to stand down from a strike originally scheduled for Tuesday after speaking with the leaders of Saudi Arabia, the United Arab Emirates and Qatar. The three Gulf states had warned that a renewed bombing campaign would derail back-channel talks brokered by Washington's Middle East envoy Steve Witkoff and senior adviser Jared Kushner. CNBC reported on Monday evening that the White House believes Iran will respond to a draft framework within 48 hours.

14-Point MOU Targets 30-Day Hormuz Reopening

The framework under discussion is a 14-point memorandum of understanding running roughly one page in current form, according to multiple Times of Israel and Axios reports. The MOU declares an end to active hostilities, opens a 30-day window to fully reopen commercial transit through the Strait of Hormuz, and commits Iran to a 12-year moratorium on uranium enrichment alongside the export of its highly enriched uranium stockpile. In exchange, Washington would lift sanctions on Iranian oil exports and release frozen funds.

Roughly 20 percent of global oil consumption transits Hormuz on any given day, and competing blockades imposed by both navies during the conflict have rerouted cargoes toward longer journeys around the Cape of Good Hope. A clean 30-day reopening would unwind that diversion premium and pull tanker freight rates back toward winter averages.

Round Trip on Brent Crosses $10 in Eight Sessions

Tuesday's slide leaves Brent within $10 of where it traded on May 6, when an initial wave of deal optimism dragged the contract to a $101.27 close. The benchmark then rallied to $120 last week after Iranian forces struck the Barakah nuclear power complex in the United Arab Emirates, a move Oil Authority covered in Monday's analysis of the sanctions-waiver tape. The round-trip move on Brent of roughly $19 between May 12 and May 19 underscores how thin liquidity becomes when traders price binary geopolitical outcomes.

Bank Forecasts Anchor Two-Sided Risk

The deal optimism does not yet override structural supply tightness in market positioning. JPMorgan's stress case continues to flag a $150 Brent path if the strait stays partially closed through the end of the third quarter, while Goldman Sachs holds its $90 fourth-quarter call contingent on a full deal closing in the next 60 days. Morgan Stanley raised its 2026 Brent average forecast to $98 per barrel on Monday from $86 previously, citing the inventory drawdown highlighted by the International Energy Agency.

IEA executive director Fatih Birol warned in Vienna on Monday that commercial OECD oil cover has fallen to roughly four weeks, the lowest reading since 2019, per Oil Authority's IEA coverage. That cushion limits how far prices can fall on deal optimism alone before refiners and traders begin re-stocking.

What to Watch Next

The next move depends on whether Tehran returns a counter-signed MOU inside the 48-hour White House window. A signed deal would likely push Brent toward Goldman's $90 base case, with WTI sliding into the high $80s. A rejection, or a counter-draft that leaves the enrichment moratorium open-ended, would put the JPMorgan $150 stress path back on the table within a session. Traders watching front-month volatility skew should also watch the ICE Brent backwardation curve, which compressed by roughly 80 cents per barrel between the June and August 2026 contracts on Tuesday morning, a sign that nearby supply fears are easing faster than the strip.