Oil prices dropped sharply on Monday as investors reacted to uncertain signals surrounding a possible agreement between the United States and Iran to ease tensions linked to the ongoing regional conflict.
Brent crude, the international benchmark for oil prices, fell by more than five percent after US President Donald Trump indicated that talks with Tehran were progressing but warned that negotiations should not be rushed.
Despite the decline, oil prices remain significantly higher than before the conflict began earlier this year due to disruptions in the Strait of Hormuz, a key global shipping route for crude exports.
Market analysts said traders are hoping a future agreement could reopen the waterway fully and release millions of barrels of delayed oil shipments back into global markets.
Meanwhile, Japan’s Nikkei 225 stock index surged to a record high, reflecting investor optimism that tensions in the Middle East may eventually ease.
Analysts cautioned, however, that even if a deal is reached, it could take several months for oil production, refining operations, and shipping routes to return to normal levels.
The Strait of Hormuz handles a major share of global oil trade, and ongoing restrictions in the region have continued to affect energy markets and international shipping.
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