LONDON—Oil prices fell sharply on Monday after U.S. President Donald Trump said he had halted a planned military strike on Iran to allow time for diplomacy aimed at addressing Tehran's nuclear program and reopening the Strait of Hormuz, easing immediate concerns over potential disruptions to global crude supplies.
Brent crude futures dropped $4.65 to $83.28 a barrel, while U.S. West Texas Intermediate crude futures fell $5.20 to $79.47, reversing part of the gains recorded during recent weeks of heightened tensions in the Middle East.
Trump said Iran and other Middle Eastern countries had requested additional time to pursue a negotiated agreement. In a post on Truth Social, he said the objective was to reach a deal that would remove Iran's nuclear threat and fully reopen the Strait of Hormuz, a critical shipping route for global oil exports.
Market participants said the prospect of renewed diplomacy reduced fears of an imminent disruption to oil flows through the Gulf, although analysts cautioned that negotiations remain uncertain and could still break down if the parties fail to bridge longstanding differences.
The decline in oil prices also followed confirmation that OPEC+ had agreed to raise production by 188,000 barrels per day beginning in September, completing the group's planned reversal of earlier voluntary output cuts. However, analysts noted that ongoing conflicts affecting oil-producing regions continue to constrain supplies, limiting the broader impact of higher production.
Despite the market's relief, no agreement between Washington and Tehran had been announced as of Monday, and diplomatic efforts remained ongoing. Officials had not confirmed a timetable for any formal accord, and developments continued to evolve.
