President Trump on Monday called off a U.S. military strike on Iran that he said had been scheduled for Tuesday, citing requests from the leaders of Qatar, Saudi Arabia and the United Arab Emirates, and oil prices fell in early Tuesday trading as traders pulled back bets on an imminent escalation of the 80-day Hormuz war.

Brent crude futures for July delivery dropped 1.9 percent to $110.01 a barrel by around 6 a.m. Eastern, according to CNBC, and U.S. West Texas Intermediate fell 1.1 percent to $107.50. The move reversed part of Monday's session, when Brent and WTI settled 2.6 percent and 3.1 percent higher and notched their sixth advance in seven days. Both contracts have climbed more than 54 percent since the U.S. and Israel opened the war on Feb. 28, when Brent traded near $70.

What Trump said

In a Truth Social post Monday afternoon, the president wrote that "serious negotiations are now taking place" and that he had instructed the Pentagon "to be prepared to go forward with a full, large scale assault of Iran, on a moment's notice, in the event that an acceptable Deal is not reached." Speaking at a White House event later in the day, Trump said, "we were getting ready to do a very major attack tomorrow," and added, "I put it off for a little while, hopefully maybe forever, but possibly for a little while."

The Tuesday strike had not been publicly disclosed before Monday's post. Last week, Trump had called the April 8 ceasefire on "life support," rejected Tehran's latest peace proposal as "garbage" and warned over the weekend that "the Clock is Ticking" for Iran.

The price action

Monday's sessions whipsawed as the news broke. Brent reached $112 overnight before easing below $107, then bouncing back, CBS News reported. The S&P 500 swiveled between gains and losses to finish down 0.1 percent, its second decline since setting an all-time high last week. The Dow Jones Industrial Average added 159 points, or 0.3 percent, and the Nasdaq composite fell 0.5 percent.

In peacetime, roughly a fifth of global oil and liquefied natural gas shipments move through the Strait of Hormuz. U.S. Central Command said Monday it had redirected 85 commercial vessels and disabled four others under a blockade of Iranian ports in place since mid-April. Maritime tracking firm Kpler logged 55 commodity vessels through the strait between May 11 and 17, in line with the wartime average of 55 a week since March 1 but a fraction of normal volumes.

What Iran wants

Iranian officials, who say their nuclear program is for peaceful purposes, have not budged on Trump's central demand that Tehran abandon enrichment and surrender its remaining stockpile. The semi-official Tasnim news agency reported Monday that a source close to the negotiating team described the latest U.S. draft as containing "adjustments" but said "fundamental differences remain, stemming from American excessive demands and lack of realism." Foreign Ministry spokesman Esmaeil Baqaei said Iran would continue diplomacy but would not be "subdued by contradictory behavior and threats," warning, "We are fully prepared for every scenario."

The White House signaled no softening on the nuclear question. Deputy press secretary Anna Kelly told Fox News that "nothing has changed" on Iran policy and that "Iran must renounce their nuclear ambitions for good." Trump told the New York Post on Monday that he was "not open" to concessions for Tehran after its latest response.

On the Street

Analysts cautioned that the postponement does not resolve the supply picture. ING commodities strategists Warren Patterson and Ewa Manthey wrote that hopes China would broker a breakthrough during last week's Trump-Xi summit in Beijing were "possibly misplaced" and that, "If anything, re-escalation risks are increasing." ING noted that some shipping has resumed in the strait, including several crude tankers and an Iraqi shipment bound for Vietnam, though flows "remain well below normal levels and could deteriorate quickly." Bloomberg reported almost two dozen tankers sitting in and around Iran's Kharg Island oil hub, which analysts said Tehran was using as a "toll booth."

Forex.com analyst Fawad Razaqzada, responding to an unconfirmed Tasnim report that Washington had offered to suspend sanctions on Iranian crude exports during talks, called the idea a "good first step, if confirmed." The Trump administration has not confirmed the offer.

The counterpoint

Iran's own posture argues against treating Monday's reversal as the start of a real off-ramp. Tehran has rejected the core U.S. demand on enrichment and continued to assert authority over Hormuz, where the Revolutionary Guard said Monday that fiber-optic cables running through the strait could be brought under a permit system. A Pakistani source told Reuters that both sides in the war "keep changing their goalposts." Former Defense Secretary Robert Gates, who served under Presidents George W. Bush and Barack Obama, told CBS's "Face the Nation" on Sunday that internal controls in Iran "seem very much intact" and that, on the U.S. side, "I don't think he can walk away."

The next test is whether the indirect talks, brokered by Pakistani intermediaries, produce a framework before Trump's next deadline, which he has not specified. The president said Monday he had told Pentagon leaders to be ready to move "on a moment's notice."