Global oil markets tumbled sharply on Monday after Donald Trump announced a delay in planned military strikes against Iran and pointed to ongoing diplomatic progress, easing fears of a prolonged supply disruption linked to the Strait of Hormuz.
As of 2:10 p.m. WAT, crude benchmarks recorded steep losses. WTI crude dropped to 88.54 dollars per barrel, down 9.86 percent, while Brent crude fell to 100.3 dollars per barrel, declining by 10.56 percent. The sharp selloff reflects a rapid unwinding of risk premiums that had built up over fears of supply shocks in recent weeks.
The decline follows confirmation by Trump that the United States has postponed planned airstrikes on Iranian power plants and energy infrastructure for five days. He said the decision was based on what he described as encouraging diplomatic engagements between Washington and Tehran, adding that further actions would depend on the outcome of ongoing discussions.
Trump also stated that both countries had held detailed and constructive conversations over the past two days, raising expectations of a possible de escalation in hostilities that have unsettled global energy markets.
The announcement represents a shift from an earlier ultimatum that required Iran to reopen the Strait of Hormuz within 48 hours or face military action. The waterway remains one of the most critical oil transit routes globally, handling about one fifth of international crude and liquefied natural gas shipments.
Despite the U.S. position, Iranian media reports have denied that formal talks with Washington have taken place, underscoring lingering uncertainty around the diplomatic process.
Iran’s Islamic Revolutionary Guard Corps has also adjusted its messaging, rejecting claims of targeting civilian water infrastructure in Gulf countries while warning that any attack on Iranian energy assets would have severe humanitarian and economic consequences. Officials maintained that retaliatory measures remain an option if tensions escalate.
Separately, Benjamin Netanyahu signalled an intensification of military operations targeting Iran’s leadership and strategic assets following recent missile strikes on Israeli territory, indicating that broader regional tensions remain unresolved.
The sharp drop in crude prices is already reshaping expectations in downstream markets, with a fuel price crash now seen as increasingly likely if the current trend persists. Lower crude input costs could translate into reduced petrol prices, particularly in import dependent economies that had recently faced upward pressure from rising global oil prices.
While the latest developments have provided temporary relief to energy markets, analysts caution that the situation remains fluid. Any breakdown in talks or renewed military escalation around the Strait of Hormuz could quickly reverse the current price trend and reintroduce volatility.