Oil Prices Fall Sharply as U.S.-Iran Tensions Ease

International crude oil prices dropped sharply on Monday as signs emerged that military tensions between the United States and Iran were easing. Hopes for a diplomatic resolution and the possibility of normal shipping through the Strait of Hormuz weighed on the oil market.

At the start of trading, Brent crude fell nearly 4 percent to $92.82 per barrel, briefly slipping below the $90 mark during the session. Meanwhile, U.S. West Texas Intermediate (WTI) crude declined about 4.5 percent to $85.29 per barrel.

Following two weeks of heightened tensions, neither the United States nor Iran launched fresh attacks over the weekend, easing concerns that the conflict could spread across the Middle East. Market analysts believe that if the situation remains stable, shipping through the Strait of Hormuz, one of the world’s most critical oil transit routes, is likely to return to normal gradually.

Meanwhile, U.S. Ambassador to the United Nations Mike Waltz said President Donald Trump had temporarily postponed potential military action against Iran to allow room for diplomatic negotiations.

However, analysts cautioned that shipping through the Strait of Hormuz has not yet fully returned to normal. They also warned that continued attacks by Yemen’s Houthi forces in the Red Sea and the ongoing Russia-Ukraine war continue to pose risks to global energy supplies.