Global oil prices tumbled more than 10% on Monday as markets reacted to signs of de-escalation between the United States and Iran. The sharp decline followed US President Donald Trump’s decision to pause military strikes on Iran on Friday, raising hopes for a diplomatic resolution to recent tensions.
Brent crude traded at $88.06 per barrel at 1845GMT, down 10.4% from the previous close of $91.68. The US benchmark West Texas Intermediate also fell significantly, dropping 8% to $82.35 per barrel. These losses marked a rapid reversal from last week, when Brent briefly climbed to $100 per barrel amid concerns over shipping disruptions through the Strait of Hormuz and the Bab el-Mandeb Strait.
Diplomatic signals ease supply fears
President Trump stated that Washington is holding 'good talks' with Tehran, though he warned that strikes could resume if negotiations fail. In response to the shifting dynamics, Iran suspended retaliatory military operations and entered talks with Oman regarding navigation through the strait. The potential for restored stability in key shipping routes contributed to the downward pressure on prices.
Supply conditions also improved elsewhere as crude loadings resumed at the Caspian Pipeline Consortium terminal on Russia's Black Sea coast. This restart helped alleviate some broader market concerns about global availability, complementing the geopolitical easing in the Middle East.
Despite the overall trend of de-escalation, regional risks remain. Houthis claimed attacks on Saudi Aramco-linked facilities in Jizan and Yanbu. However, neither the Saudi government nor Aramco confirmed these claims.