Global crude oil prices crashed over 5% on Monday after U.S. President Donald Trump suspended planned military strikes on Iran, opting to negotiate a deal to open the Strait of Hormuz.
Brent crude futures plunged $4.49, or 5.11%, to $83.44 per barrel. Concurrently, U.S. West Texas Intermediate dropped $4.90, or 5.79%, to settle at $79.77 per barrel.
The sudden market retreat follows a sharp rally last month when both benchmarks surged over 20% due to escalating strikes on Middle Eastern oil tankers and energy facilities.
Trump announced via Truth Social that Washington agreed to hold off on fresh attacks after Middle Eastern allies requested time to finalize negotiations addressing Tehran’s nuclear capabilities.
A primary condition for the truce requires the immediate, complete reopening of the Strait of Hormuz, a critical maritime transit point handling roughly 20% of global daily petroleum flows.
“We have just been asked by Iran, and other Middle Eastern Countries, to hold off any attack in that the perimeters of a deal has been agreed to.” Trump said.
Despite early market relief, analysts warn that supply risks remain elevated, as shipping operators require firm security guarantees before resuming normal traffic through the volatile waterway.
