Oil stays elevated as Trump seeks to keep Iran talks alive

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Oil stays elevated

Highlights

Trump intervened after Israel threatened strikes on Hezbollah targets in Beirut.
Iran warned it could halt talks with the U.S. unless Israel stopped attacks in Lebanon.
Oil remained elevated, with WTI at $91.34 and Brent at $94.16 in the latest market snapshot.

Trump presses Netanyahu to step back

According to Axios, Trump spoke with Israeli Prime Minister Benjamin Netanyahu on Monday after Israel threatened strikes on Hezbollah targets in Beirut’s Dahieh district. An Israeli official later told Axios that the planned Beirut strikes would not happen, signaling that Washington was trying to prevent the Lebanon front from derailing the Iran track.

The pressure followed a warning from Iranian Foreign Minister Abbas Araghchi, who said Israeli actions in Lebanon violated the U.S.-Iran cease-fire and that Washington and Israel would bear responsibility for any consequences. Iranian officials also told that talks with the U.S. would not continue until Israel stopped its attacks in Lebanon.

Diplomacy remains fragile

After the call with Netanyahu, Trump said Iran talks were continuing “at a rapid pace.” He also claimed Israel and Hezbollah would stop attacking each other.

The proposal, put forward by Secretary of State Marco Rubio, would involve Israel suspending planned attacks on Beirut while Hezbollah stops attacks on Israel. Netanyahu, however, said Israel would continue operations in southern Lebanon and would strike Beirut if Hezbollah kept attacking Israeli cities and civilians.

Oil prices ease but remain elevated

Oil prices pulled back slightly after the latest diplomatic intervention, though they remained high by recent standards. West Texas Intermediate crude traded at $91.34 a barrel, down 0.89%, while Brent crude fell 0.86% to $94.16, according to the latest market snapshot.

The decline suggests traders took some relief from Trump’s effort to prevent Israeli strikes on Beirut, but the risk premium has not disappeared. Markets are still watching whether U.S.-Iran talks continue and whether threats involving the Strait of Hormuz return to the center of the conflict.

Oil markets still carry a war premium

The market reaction shows that crude traders are no longer focused only on direct U.S.-Iran strikes. The Lebanon front has become part of the same risk calculation because Tehran has linked Israeli action there to the future of U.S.-Iran talks.

That matters for energy prices because any breakdown in diplomacy could delay progress on reopening or stabilizing the Strait of Hormuz. The waterway handled about 20 million barrels a day of oil in 2024, according to the U.S. Energy Information Administration, leaving global supply exposed to every new escalation in the Gulf or Lebanon.

We also reported stocks slip from records after Iran says it will suspend talks.

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