Oil prices fall nearly 5% on US-Iran negotiation announcement

Global oil prices plummeted nearly 5% in early Asian trading Monday after U.S. President Donald Trump announced new negotiations aimed at ending the conflict in the Middle East. The announcement signaled a potential de-escalation following recent heightened tensions.

By 22:50 GMT on Sunday, the international benchmark Brent crude oil price had fallen 4.69% to $83.81 per barrel. Its U.S. counterpart, West Texas Intermediate (WTI), saw a similar decline, dropping 4.67% to $80.72 per barrel.

The market reaction followed a significant shift in U.S. policy. After initially threatening Iran with massive military strikes, Trump decided against further bombings on Saturday, contingent on a swift agreement, particularly concerning the opening of the Strait of Hormuz. This waterway is critical for global hydrocarbon trade.

Adding to the easing tensions, Iran announced Sunday it was close to an agreement with Oman regarding transit through the Strait of Hormuz. President Trump subsequently confirmed new negotiations with Tehran would commence on Monday, leading to the sharp sell-off in oil prices.