Oil prices drop over 5% on renewed hopes for U.S.-Iran deal

Oil prices plummeted in Asian markets on Monday, with Brent crude down 5.58% to $91.38 a barrel and U.S. WTI falling 5.46% to $84.43. Investors are relieved after two nights without U.S. strikes on Iran, creating an opening for further negotiations.

U.S. Ambassador to the UN, Mike Waltz, stated that President Donald Trump is giving "a little margin" to diplomacy with Iran, though he has not abandoned threats of escalation. Following two weeks of U.S. bombings, no new attacks have occurred since Friday night.

The market's reaction signals hope for a truce that could allow the resumption of navigation through the Strait of Hormuz, a vital chokepoint currently under Iranian control. This strait typically handles one-fifth of the world's daily oil and liquefied gas consumption.

Adding to market concerns is a maritime blockade of Saudi ports by Yemen's Houthi rebels, who are allied with Iran. Previously, a tentative agreement between Washington and Tehran on June 17 had caused prices to drop, with Brent trading just above $70. However, rising tensions in July led to a price surge.