Oil prices plummet after Trump announces truce

Oil prices experienced a sharp decline on Monday following the announcement of a ceasefire between the United States and Iran. Brent crude futures dropped as much as 7.8%, or $7.55, to around $89.23 per barrel, while U.S. West Texas Intermediate (WTI) fell $6.01, or 6.7%, to $83.30.

These price drops reversed recent gains, which had pushed Brent above $100 per barrel last Thursday amid escalating conflict. The truce revived expectations of a potential de-escalation and the resumption of maritime traffic through the Strait of Hormuz, a vital route for global oil trade. However, the geopolitical landscape remains fragile.

The conflict, which began on February 28 with U.S. and Israeli airstrikes against Iran, had caused thousands of casualties and disrupted global trade, blocking traffic through the Strait of Hormuz, which previously handled nearly a fifth of the world's hydrocarbon trade. Despite a ceasefire in April and a June agreement for lasting peace, hostilities resumed earlier this month.

Adding to the uncertainty, Iran's Foreign Ministry stated on July 27 that the U.S. was not involved in recent talks with Oman regarding the management of the Strait of Hormuz. Iranian Foreign Ministry spokesperson Esmail Baqai denied any ongoing negotiations with the U.S., calling reports of diplomatic contacts "inventions" and accusing Washington of acting like a "mafia gang."