Trump: US to Cancel Iran Attack Subject to a Rapid Deal

Former U.S. President Donald Trump announced that the United States would cancel planned military strikes against Iran, provided a rapid deal could be reached. According to Trump, Iran and other Middle Eastern countries requested a halt to the attacks, stating that the “perimeters of a deal” had been agreed upon. This development is seen as a significant step towards potentially de-escalating regional tensions and reducing uncertainty in global energy markets.

President Trump stated on his Truth Social account that the U.S. was “locked and loaded and ready to go against the Islamic Republic of Iran, at levels of Military Terror, Strength, and Power not seen since World War II,” but agreed to hold off the attack at the request of Iran and other Middle Eastern countries. Key elements of the proposed deal include the “Immediate, Complete, and Total OPENING OF THE HORMUZ STRAIT, and an end to Iran's nuclear threat.” Trump also indicated that Israel joins this commitment. These statements signal a diplomatic push in the ongoing and often escalating U.S.-Iran tensions.

The tensions between the U.S. and Iran have exerted significant pressure on global markets, particularly concerning the security of oil shipments through the Strait of Hormuz. In recent months, heightened geopolitical risks in the region drove oil prices higher, with Brent crude surpassing $100 per barrel. While this latest development could offer some relief to oil markets, volatility may persist due to uncertainties surrounding the deal's specifics and implementability. Concerns about a global economic slowdown also continue to weigh on oil demand.

This diplomatic initiative follows a period of heightened tensions that escalated after the U.S. withdrew from the Iran nuclear deal (Joint Comprehensive Plan of Action - JCPOA) in 2018. At that time, the U.S. imposed extensive sanctions targeting Iran's energy, petrochemical, and financial sectors. More recently, reports indicated that the U.S. and Israel were preparing for a severe bombing campaign against Iran's energy infrastructure targets, further unsettling markets. Saudi Crown Prince Mohammed bin Salman reportedly cautioned President Trump against launching new strikes.

Market analysts suggest that a reduction in regional tensions could boost global risk appetite and potentially decrease demand for safe-haven assets. However, the geopolitical risk premium on oil prices and other commodities is unlikely to dissipate entirely until a comprehensive deal is finalized. JPMorgan analysts previously warned that a closure of the Strait of Hormuz could significantly depress global GDP growth. In this context, Trump's announcement is perceived as a glimmer of hope for accelerating negotiations and finding a lasting resolution. Nevertheless, given past disagreements and fragilities, markets will monitor developments with cautious optimism.