Oil prices fell sharply after signs of a possible easing in tensions between the United States and Iran, following US President Donald Trump’s announcement that a proposed military action against Iran had been postponed and that new negotiations would begin.
West Texas Intermediate (WTI) crude settled at $79.87 per barrel, down $4.80 or 5.67%, while Brent crude dropped to $83.57 per barrel, a decline of $4.36 or 4.96%.
Market analysts said investors interpreted the latest developments as a sign that tensions in the Middle East could ease, reducing immediate concerns over disruptions to global oil supplies and putting downward pressure on crude prices.
Speaking to reporters while returning from New Jersey to Washington, Trump said the United States and Iran would hold important talks on Monday afternoon.
However, he did not disclose the location of the negotiations or identify the participants. He also declined to set a deadline for reaching a possible agreement, saying he preferred a diplomatic solution over military conflict because wars result in significant loss of life.
Earlier, Trump wrote on his social media platform, Truth Social, that Iran, Saudi Arabia, the United Arab Emirates and Qatar had asked the United States to delay military action to allow for the immediate reopening of the Strait of Hormuz and to pursue an agreement on Iran’s nuclear programme.
According to a foreign news agency, Trump has maintained a tough stance on Iran for several months and has repeatedly warned of possible military action. However, each time, military plans have been postponed to provide additional opportunities for diplomacy.
Meanwhile, the closure of the Strait of Hormuz by Iran continues to place pressure on global energy markets. Around 20% of the world’s oil and liquefied natural gas shipments pass through the strategic waterway, raising concerns over higher oil prices and inflation if disruptions continue.
Trump said preventing Iran from obtaining nuclear weapons remains a top priority for the United States. At the same time, rising energy prices and growing economic pressure have increased calls for a diplomatic resolution instead of military action.
