Brent crude oil prices dropped sharply toward $98 per barrel on Monday as global energy markets reacted to growing optimism over possible negotiations between the United States and Iran that could eventually reopen the Strait of Hormuz and restore disrupted oil flows to international buyers.
Brent crude traded between $98.45 and $98.80 per barrel during Monday’s session, down nearly 5 percent on the day and below the psychologically significant $100 threshold for the first time in several weeks. US West Texas Intermediate (WTI) crude also retreated, slipping below $92 per barrel.
The declines extended losses from the previous week as investors priced in the possibility of a framework agreement between Washington and Tehran that could lead to the Strait’s reopening, the release of some frozen Iranian assets, and renewed discussions over Iran’s nuclear programme.
US President Donald Trump tempered the market’s optimism, cautioning that no final agreement had been reached and that restrictions around the Strait would remain in place until a formal deal was completed. “I won’t rush into a deal,” he said.
The Strait of Hormuz handles roughly one-fifth of global oil and liquefied natural gas (LNG) shipments, making it among the world’s most strategically important energy corridors. Its disruption over recent months has intensified supply concerns, driven up freight costs, and fuelled inflation pressures across major importing economies. Gas prices in the United States climbed from below $3 per gallon before the conflict began to more than $4.50 per gallon in recent weeks.
Financial markets broadly welcomed the diplomatic signals. European and Gulf stock markets advanced on Monday, and airline and transport stocks gained on expectations that lower energy costs could follow a resolution of the Strait dispute.
Analysts cautioned, however, that oil markets remained highly volatile. The underlying conflict between the United States and Iran had not been fully resolved, shipping flows through the Strait had not returned to normal, and any collapse in negotiations or renewed disruption could push prices sharply higher in the weeks ahead.
