Iran signals halt to strikes as US bombing pause holds, oil prices tumble on diplomacy hopes

Iran says it will suspend retaliatory strikes if the United States maintains its bombing pause, while oil prices fall as markets cautiously welcome prospects for renewed diplomacy.

WEBDESK – MEDIABITES

The United States and Iran appeared to edge toward a fragile de-escalation on Sunday after Tehran said it would suspend retaliatory military strikes as long as Washington refrains from resuming air attacks, offering cautious optimism that diplomacy could replace nearly two weeks of escalating conflict.

The reciprocal pause also rippled through global energy markets, with oil prices falling more than 4% on Monday as investors scaled back fears of a wider Middle East war that could disrupt global crude supplies.

A senior Iranian official told Reuters that Tehran’s approach remained based on reciprocity, describing its policy as “attack for attack.” The official said Iran had conveyed to Washington that it would halt military operations provided the United States continued its suspension of bombing raids.

The comments followed the Pentagon’s decision to pause its air campaign late Friday after 13 consecutive nights of strikes against Iranian targets. No U.S. attacks were reported on Saturday or Sunday, while Iran also refrained from launching new retaliatory attacks during the same period.

The temporary lull comes amid mounting concern within the Trump administration over the sustainability of continued military operations. U.S. Ambassador to the United Nations Mike Waltz said President Donald Trump had chosen to pause the bombing campaign to allow diplomatic efforts an opportunity to advance.

“He’s giving talks some space, he’s giving it a little bit of room,” Waltz said during television interviews, without providing details about any ongoing negotiations.

According to a U.S. official familiar with internal discussions, military planners warned that many of the campaign’s pre-selected targets linked to Iranian threats against shipping in the Strait of Hormuz had already been struck. Senior commanders also reportedly raised concerns over dwindling U.S. munitions stockpiles, including air-defense interceptors deployed across the Middle East.

Reports said General Dan Caine, chairman of the Joint Chiefs of Staff, advised Trump that while large-scale operations could resume if necessary, doing so would place additional strain on military resources. The Pentagon and U.S. Central Command declined to comment on the reports.

Despite the pause, Iranian officials remain deeply skeptical about Washington’s intentions.

“There is more skepticism than optimism about the halt in attacks,” another senior Iranian source told Reuters, adding that Tehran views the suspension as a tactical decision rather than a lasting shift toward peace.

The latest confrontation erupted after Washington intensified military operations, saying it was responding to Iranian attacks on commercial shipping in the Strait of Hormuz, one of the world’s most strategically important energy corridors. Iran retaliated by targeting water desalination facilities in Gulf Arab states while insisting it intended to preserve its influence over the waterway through which roughly one-fifth of global oil shipments previously passed.

The renewed fighting also derailed an interim agreement reached last month that had been designed to lower tensions and create space for broader negotiations.

Reports in U.S. media said Trump agreed to pause the bombing campaign after senior advisers, including Vice President JD Vance and top military commanders, questioned whether continued strikes would achieve further strategic gains. Axios reported that Admiral Brad Cooper, commander of U.S. forces in the Middle East, recommended suspending operations after concluding the campaign had reached the limits of its effectiveness.

Inside Iran, uncertainty persists over whether the lull will endure.

“Everyone in the country is stuck in limbo,” said Nader, a 49-year-old import-export businessman in Tehran. “Trump is playing games with Iran. He neither ends the war and leaves the region nor strikes decisively. It’s exhausting.”

Oil prices fall sharply as conflict fears ease

Financial markets reacted swiftly to the diplomatic opening, with Brent crude futures dropping $3.96, or 4.1%, to $92.82 a barrel in early Monday trading after briefly falling below the psychologically important $90 level. U.S. West Texas Intermediate crude declined $4.02, or 4.5%, to $85.29 per barrel.

The decline followed three weeks of steady gains that had briefly pushed Brent crude close to $100 a barrel amid fears the conflict could severely disrupt oil flows through the Strait of Hormuz and the Red Sea.

Analysts said the absence of fresh military action reduced immediate concerns over supply interruptions.

“Oil prices fell sharply in early trading as the U.S. and Iran refrained from further military action, offering the first tangible signs of a potential de-escalation in tensions,” analysts at ING said in a research note.

“The price action in oil this morning clearly reflects the market’s desperation for positive news,” they added.

Even so, shipping through the Strait of Hormuz remains well below normal levels. Data from shipping analytics firm Kpler showed that fewer than 10 commodity vessels transited the strategic waterway each day over the weekend, underscoring continued caution among shipping companies.

Saul Kavonic, an analyst at MST Marquee, said any normalization of maritime traffic would likely be gradual.

“Any rebound in flows through the Strait of Hormuz is likely to prove slow and partial, as many shippers remain wary and will want greater confidence in their safety before they bring more empty ships into the Strait,” he said.

Markets are also watching continued disruptions in the Red Sea after Yemen’s Houthi movement attacked Saudi oil infrastructure along the coast, while the Russia-Ukraine conflict remains another source of uncertainty after Ukraine reported strikes on several Russian oil facilities over the weekend.

Analysts at UOB said sustained disruptions in either region could continue supporting oil prices despite Monday’s decline.

While the current pause has eased immediate fears of a broader regional conflict, diplomats and investors alike remain focused on whether both Washington and Tehran can maintain restraint long enough to create a pathway toward meaningful negotiations.