Oil prices drop after Trump tries to reassure traders that peace deal is coming

By Nora Redmond

Oil prices declined after President Donald Trump said the memorandum of understanding (MoU) would be completed "over the next week."

Oil prices dipped on Tuesday after President Donald Trump attempted to reassure investors that a deal between Washington and Tehran is still coming, despite fading hopes driven by a fresh round of strikes between the two countries over the weekend.

The West Texas Intermediate contract for July delivery (CL.1) (CLN26) edged 1% lower to $91.16 a barrel, following hitting its biggest one-day dollar and percentage gain since the end of April on Monday. Brent crude's August contract (BRN00) (BRNQ26) dipped by more than 1% to $93.82 a barrel, having previously reached its highest price since the start of May, per Dow Jones Market Data.

The boosts came after Iran's state-affiliated media outlet Tasnim reported that the country will stop negotiations with the U.S. and move to fully close the Strait of Hormuz after Israeli Prime Minister Benjamin Netanyahu ordered strikes on the southern suburbs of Beirut, the capital of Lebanon.

But the mood among investors began to improve when President Donald Trump claimed that Israel and Hezbollah had agreed to stop fighting and that discussions between Washington and Tehran were "continuing, at a rapid pace," in a post on Truth Social later on Monday.

He then told ABC News that he expected the 60-day memorandum of understanding (MoU), which would extend the cease-fire before a more permanent deal is agreed upon, to be completed as well as the Strait of Hormuz to be reopened "over the next week."

"The market's default baseline still seems to be that a deal is coming and that traffic through the Strait of Hormuz will eventually normalise," Patrick Munnelly, market strategist at Tickmill Group, wrote in a note on Tuesday.

-Nora Redmond

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06-02-26 0757ET