Oil prices fell by nearly five per cent in early Asian trading on Monday after US President Donald Trump announced fresh negotiations with Iran aimed at ending the ongoing Middle East conflict and reopening the strategically important Strait of Hormuz.
According to Channels Television, citing AFP, Brent North Sea crude for September delivery dropped 4.69 per cent to $83.81 per barrel, while US benchmark West Texas Intermediate (WTI) declined 4.67 per cent to $80.72.
The sharp decline followed Trump’s announcement that the United States would begin new talks with Iran on Monday, after deciding to suspend planned large-scale military strikes in favour of diplomatic efforts.
Speaking on Sunday, Trump said: “Now what we’re doing is we’re talking to them in the form of a negotiation. It begins tomorrow afternoon.” He did not disclose where the talks would take place or who would participate.
The Middle East conflict, which began in late February after the United States and Israel launched attacks on Iran, has triggered significant volatility in global oil markets. The fighting effectively shut the Strait of Hormuz, one of the world’s most critical shipping routes for crude oil and liquefied natural gas exports.
Hours after Washington paused its planned strikes, Iran also announced it was close to reaching an agreement with Oman on a new route through the Strait of Hormuz, raising hopes that energy supplies could soon resume through the vital waterway.
The prospect of renewed diplomacy and the possible reopening of the Strait eased concerns over supply disruptions, prompting a sharp sell-off in oil markets.
