Oil prices tumbled Sunday after a senior Iranian official told Reuters that Tehran will halt its own attacks as long as the United States keeps its bombing pause in place. The move eased nearly two weeks of escalating conflict that had loaded a heavy war-risk premium onto global energy markets.

The price of Brent crude oil fell over 7% to touch a low of .9 a barrel. West Texas Intermediate crude oil also dropped as much as 7% to touch . The slide unwound a large part of the geopolitical premium traders had built into prices as the confrontation intensified, a premium that reflects the risk of supply disruption rather than any actual change in barrels flowing to market.

Tehran Sets Conditions for Oil

The Iranian source described Tehran’s stance as “attack for attack.” Iran will stop its operations once the US stops, and Tehran has already passed that message to Washington, according to the official’s account. The framing leaves the durability of any truce entirely dependent on both sides holding their fire at the same time.

“There is more scepticism than optimism about the halt in attacks. The prevailing view is that the pause is tactical rather than genuine.”

The pause follows Washington’s decision to suspend its bombing campaign after 13 nights of US strikes. Advisers reportedly warned President Donald Trump that the military was running low on viable targets. They also raised concerns about depleting weapons stockpiles.

US Ambassador to the United Nations Mike Waltz said Trump chose the pause to give diplomacy room. Iranian officials voiced more doubt than hope that the calm will last, a mood that helps explain why the drop in prices was sharp but not euphoric.

Fed Watching Inflation Risk

HSBC US rates strategist Dhiraj Narula said pricier oil has revived bets that the Federal Reserve may hold rates higher for longer. He noted inflation expectations have stayed contained so far. Narula credited firm Fed messaging on price stability for that resilience, which has kept the energy rally from feeding into longer-term forecasts.

The link matters well beyond the oil pit. Energy costs flow through the wider price basket, so a sustained crude spike can lift headline inflation and push the Fed toward a more cautious, higher-for-longer stance. Tighter policy expectations tend to weigh on risk assets, and crypto markets in particular often trade in step with that macro backdrop. A cooling in oil, by contrast, loosens one source of inflationary pressure and can give risk appetite a little more room to breathe.

Brent held near a barrel into Monday, confirming Sunday’s drop stuck rather than snapping back. Whether the halt lasts through the week will test if Tehran’s skepticism proves right, or if the pause turns into lasting de-escalation. For traders across oil, equities and digital assets alike, the key question is simple: is this a genuine off-ramp from the conflict, or merely a tactical breather before the next round.

Source: BeInCrypto