NEW DELHI: Global oil prices plunged sharply on Monday after Donald Trump announced that talks have been held to end the ongoing conflict involving Iran, raising hopes of a possible de-escalation.
The statement triggered an immediate reaction in energy markets, with benchmark crude prices dropping as investors priced in reduced geopolitical risk and a lower likelihood of supply disruptions.
Oil had surged in recent weeks due to escalating tensions in the Middle East and fears of disruption to key supply routes. However, Trump’s indication of diplomatic engagement led to a rapid unwinding of risk premiums, pushing prices downward.
Global equity markets also responded positively, reflecting improved investor sentiment amid hopes that the conflict may not intensify further.
The easing of tensions has temporarily reduced fears surrounding the Strait of Hormuz—a critical passage through which a significant share of the world’s oil supply flows.
Any threat to this route typically results in price spikes, but the prospect of negotiations has calmed immediate concerns over supply shocks.
Oil prices had climbed to multi-month highs as the conflict escalated, with markets bracing for potential attacks on energy infrastructure and shipping lanes.
The latest comments from Trump mark a shift toward diplomacy, following days of heightened military tensions and global uncertainty.
While the sharp drop reflects optimism around a possible resolution, analysts warn that oil markets remain highly volatile, and prices could rebound quickly if talks falter or tensions flare up again.
