Oil prices saw a sharp drop on Monday after US President Donald Trump indicated progress in talks with Iran, easing fears of an immediate escalation in the ongoing Middle East tensions.
The sudden shift in tone from conflict to negotiation brought some relief to global markets, which had been on edge earlier in the day.
Oil prices had initially surged in the morning as fears of supply disruptions pushed Brent Crude towards $113 per barrel. WTI crude also saw gains during early trade.
At around 5:30 pm, Brent Crude was trading near $100.34, lower by about 6.2%, reflecting continued pressure despite some recovery.
Earlier in the day, markets had reacted strongly to Trump’s warning that the US could take tough action if Iran did not reopen the Strait of Hormuz, a key global oil route.
However, the tone changed quickly. Trump later said that the US had held “very good and productive conversations” with Iran over the past two days.
He added that the talks are aimed at a “complete and total resolution” of tensions in the Middle East. Based on the progress so far, the US has decided to pause planned strikes on Iranian power plants and energy infrastructure for five days.
The pause, he said, will depend on how the discussions move forward in the coming days.
Meanwhile, for now, investors are closely watching how the talks between the US and Iran unfold. If discussions continue positively, oil prices may remain under pressure.
However, any setback or renewed tensions could quickly push prices higher again.