US President Trump decided to suspend airstrikes against Iran, creating space for diplomatic mediation. Iran simultaneously halted its retaliatory attacks, but its stance remained reserved. Following the mutual cessation of strikes, market concerns about supply disruptions in the Strait of Hormuz significantly eased, leading to a sharp drop in international oil prices on Monday (July 27), with US crude oil falling by more than 6% at one point. The US dollar index also weakened, while gold benefited and rose. This series of developments reflects the diminishing marginal returns of military action and the reopening of diplomatic channels.

Military operations reach their limit: Trump presses the pause button.

After 13 consecutive nights of intensified airstrikes against Iran, the U.S. military suspended operations late Friday night, with no new attacks launched on Saturday and Sunday. U.S. officials revealed that one of the core reasons for the suspension was the near exhaustion of the target list, coupled with concerns about the rapid depletion of ammunition reserves, particularly Middle Eastern air defense interceptor missiles. Chairman of the Joint Chiefs of Staff, General Kane, has privately warned of the risk to ammunition reserves if large-scale operations resume. Admiral Cooper, commander of U.S. Central Command, also recommended halting bombing near the Strait of Hormuz, stating that the operation had reached its effectiveness limits and that continuing airstrikes was "meaningless," adding that the current pace was ineffective unless large-scale operations resumed. U.S. Ambassador to the United Nations, Walz, publicly stated that Trump's move was intended to leave room for negotiations. Advisors, including Vice President Vance, also expressed reservations about further escalation. Trump himself stated on Sunday that the situation with Iran was progressing well and that both sides were in dialogue, but Iran was not yet ready to reach an agreement. The U.S. still retains the option of resuming large-scale operations.

Iran halts operations, but doubts remain: diplomatic channels remain open.

A senior Iranian official stated that Iran will suspend its own attacks should the United States cease its attacks, a message that has been conveyed to the US. Tehran's position remains "an attack in response to an attack." However, Iranian sources emphasized that there is "more skepticism than optimism" regarding a suspension of airstrikes, generally viewing it as a tactical adjustment rather than a genuine change of heart, due to the profound lessons learned from past instances of being "deceived." An Iranian Foreign Ministry spokesperson confirmed that information exchanges and mediation activities between Iran and the US are continuing. The Iran-US memorandum of understanding contains only 14 articles, but the US actions have blatantly violated many of them, resulting in the "third betrayal" of diplomatic efforts. Meanwhile, negotiations between Iran and Oman on the Strait of Hormuz have achieved fruitful progress. In technical and political consultations, both sides discussed in depth common principles and operational mechanisms for ensuring safe passage of ships, emphasizing that arrangements must respect the sovereign rights of coastal states. Officials stated that the talks were highly constructive, and positive progress was made in negotiations to restore normal navigation. Iran's Supreme Leader reiterated his support for Hezbollah's strategic policies and made maintaining Lebanon's territorial integrity and a full and unconditional end to Israel's military operations in Lebanon the primary conditions for reaching an understanding with the United States on ending the conflict.

Market reacted swiftly: oil prices fell sharply while gold strengthened.

As the US and Iran suspended mutual strikes, market concerns about the supply chain eased. International oil prices opened sharply lower on Monday, with US crude oil falling more than 6% to around $83.10 per barrel at one point. The latest data shows WTI crude oil at around $83.93 per barrel. Inflation concerns subsequently eased, which eased pressure on the Federal Reserve to raise interest rates. The US dollar index opened lower and continued to decline, falling as much as 0.23% to 101.22, and is currently around 101.3. Spot gold opened more than $40 higher, rising as much as 1% to reach $4096.33 per ounce, and is currently around $4095 per ounce.

Editor's Summary

The cessation of strikes between the US and Iran marks a temporary pause in the two-week-long high-intensity air campaign, with the effectiveness of military measures and the reality of ammunition depletion driving a shift in policy. Diplomatic channels are not entirely closed; progress between Iran and Oman on the management of the Strait of Hormuz offers a potential path for shipping safety, but a lack of mutual trust remains the core obstacle. The rapid pullback in oil and the dollar, along with the rise in gold as a safe haven, clearly reflects the market's repricing of geopolitical risk premiums. The key going forward lies in whether the pause can translate into substantial negotiating results and whether the threshold for resuming large-scale operations has been triggered.

Frequently Asked Questions

Q: Why did Trump suddenly pause the airstrikes after 13 consecutive days? A: Primarily based on both military and diplomatic considerations. The US military's target list was essentially exhausted, and continuing the current pace would yield limited benefits; ammunition, especially air defense interceptor missiles, faced the risk of rapid depletion, as warned by the Chairman of the Joint Chiefs of Staff and other senior advisors. Simultaneously, a pause would allow room for diplomatic maneuvering, and the Central Command Commander also recommended stopping as the effectiveness had reached its limit. Trump himself indicated a preference for a strategy focused on reaching an agreement, while retaining the option of escalation. Q: What is Iran's attitude towards the pause in the airstrikes? Is there a genuine ceasefire? A: Iran stated that it would also suspend operations if the US ceased its attacks, and this message has been conveyed to the US. In fact, no further firing has occurred for two consecutive days. However, officials and sources emphasize "more skepticism than optimism," believing this is more of a tactical adjustment than a major shift in stance, based on past experiences of being deceived. Tehran still adheres to the principle of "responding to an attack with an attack" and remains skeptical of the US's sincerity in fulfilling the memorandum of understanding. Q: What is the progress of the Strait of Hormuz negotiations? What impact will it have on shipping? A: Iran and Oman have held multiple rounds of technical and political consultations, achieving phased results on common principles and operational mechanisms for safe passage. The exchanges between the two sides have been constructive, and the consultations continue to advance. The negotiations emphasize respect for the sovereignty of coastal states. Currently, the shipping situation in the Strait has not changed substantially, but positive progress helps reduce the risk of blockade or disruption, which is one of the important factors easing market concerns. Q: Why did oil prices fall sharply on Monday? What implications does this have for inflation and the Fed's policy? A: The mutual halt of attacks between the US and Iran directly alleviated market panic regarding the disruption of shipping in the Strait and supply shortages. Risk premiums were quickly reversed, and US crude oil once fell by more than 6% to around $83. The decline in oil prices helps reduce global inflationary pressures, thus mitigating the urgency for further Fed rate hikes. The simultaneous weakening of the US dollar index also reflects a recovery in risk appetite and a slight adjustment in policy expectations. Q: Under the current circumstances, where might the situation go next? A: The key window lies in whether diplomacy can make substantial progress. Information exchange and mediation between Iran and the US are still ongoing, with the Omani channel providing a buffer. If negotiations achieve a breakthrough, the suspension may be extended; if progress stalls or Iran fails to demonstrate sufficient sincerity, the US can still quickly restart large-scale operations. Iran's condition of supporting Hezbollah and ending the Israeli-Palestinian operations in Lebanon adds complexity. The market will continue to focus on the actual resumption of air traffic and statements from both sides, potentially increasing volatility in oil and gold prices. As of 07:53 Beijing time, US crude oil is trading at $84.74 per barrel.