Brent crude swung $4 in a single session Monday. It touched $112.10 in early trading after reports that the Pentagon had drawn up plans for strikes on Iranian military targets. By the afternoon, it had pulled back to around $111 after Trump announced he was standing down.
The reversal started late Sunday. Saudi Arabia, Qatar, and the UAE reached Trump directly and asked for two to three more days, telling him they believed a deal was within reach. Trump confirmed the decision on Truth Social, calling the planned operation "a very major attack" that he had put off "for a little while, hopefully, maybe forever." Speaking at the White House later, he added: "If we can do that without bombing the hell out of them, I'd be very happy."
He did not shut the door entirely. The military has been told to stay ready for what Trump called "a full, large scale assault of Iran, on a moment's notice" if talks fail. He put the odds of a deal at "high probability."
WTI followed the same path. It jumped above $108 before falling back to around $104, down more than 4.5% from Friday. Part of that move has nothing to do with geopolitics. The June WTI contract (CLM26) expires Wednesday, and the roll to July (currently around $101) is pulling the front month lower.
A 14-point proposal and no agreement
Iran sent a new 14-point peace proposal to Pakistani mediators on Monday. State-linked Iranian media said the document is focused entirely on ending the war and does not touch nuclear issues. That is a problem for Washington, which wants a written commitment from Tehran to abandon nuclear weapons as part of any deal.
Beijing added its own condition. Foreign Minister Wang Yi said any agreement on Hormuz must rest on a "permanent and comprehensive ceasefire," ruling out the step-by-step approach Washington has been pushing. Tehran wants sanctions relief first. Washington wants a nuclear framework first. Nobody has moved.
Hormuz traffic tells the story. Since Project Freedom launched on May 4, transit has dropped to roughly one vessel a day against a pre-war baseline of more than 120. US Central Command says it has turned back 48 Iranian ships over the past 20 days. Iraq's seaborne exports through the strait fell from roughly 93 million barrels a month to barely 10 million in April.
War premium versus demand reality
The $4 intraday swing in Brent captures the two-way risk traders face. A strike would have squeezed an already tight market. IEA data out Monday put the global inventory draw at 8.5 million barrels a day for the second quarter. Calling off the attack took some heat out of the prompt, but the underlying deficit hasn't gone anywhere.
Demand destruction is chipping away from the other side. The IEA cut its 2026 consumption forecast again, and Asian refiners have started trimming runs. Brent near $111 is painful enough to slow buying, but the market can hold these levels as long as Hormuz stays closed through June.
The June WTI contract expires Wednesday, which will push the quoted price down to around $101 on the roll alone. That drop is mechanical, not fundamental. The real picture hasn't changed: supply is short, diplomacy has a two-to-three-day window, and Trump's finger is still on the trigger.