Global oil prices fell sharply on Monday, dropping to their lowest levels in two weeks, amid growing optimism that the United States and Iran may be edging closer to a peace agreement that could ease tensions around the Strait of Hormuz.
Brent crude futures declined by $5.04, or 4.9 per cent, to $98.50 per barrel, while U.S. West Texas Intermediate crude dropped $4.82, or five per cent, to $91.78 per barrel.
The market reacted to comments by Donald Trump, who said Washington and Tehran had largely negotiated a framework for a potential peace deal that could lead to the reopening of the Strait of Hormuz — a critical route that previously handled about one-fifth of global oil and liquefied natural gas shipments before the conflict escalated.
Despite the optimism, key disagreements remain unresolved. Trump also cautioned on Sunday that negotiators should not rush into reaching an agreement.
Analysts say the global supply deficit remains a major concern, warning that even if a deal is reached, restoring full oil production and export capacity across the Middle East could take several months.
Iran’s top negotiator and foreign minister were reportedly in Doha for discussions with Qatari officials over a possible agreement with the United States. However, Iran’s Foreign Ministry spokesman, Esmaeil Baghaei, stated that Tehran was focused on ending the war and not currently discussing nuclear matters.
Shipping data showed signs of gradual recovery in the region’s energy trade, with two liquefied natural gas tankers moving through the Strait of Hormuz toward Pakistan and China, while a supertanker carrying Iraqi crude also departed the Gulf after being stranded for nearly three months.
Meanwhile, higher energy prices in the United States encouraged oil producers to increase drilling activities. Energy services company Baker Hughes reported that the number of active oil and gas rigs rose by seven to 558 last week, marking the fifth consecutive weekly increase.
