Key facts
- Oil prices fell more than 5% on Monday.
- The decline followed U.S. President Donald Trump's decision to pause strikes on Iran.
- This pause raised hopes for a diplomatic solution and de-escalation of the Middle East conflict.
- Brent crude futures dropped to $91.20 per barrel.
- U.S. West Texas Intermediate crude fell to $84.40 per barrel.
Oil prices extended losses on Monday, with Brent crude futures slipping 5.77% to $91.20 and U.S. West Texas Intermediate crude falling 5.50% to $84.40. The decline was attributed to U.S. President Donald Trump pausing strikes on Iran, which has raised hopes for a diplomatic resolution and de-escalation of the Middle East conflict. Analysts noted that oil markets had previously spiked to five-month highs due to fears of retaliation following U.S. strikes on Iranian territory, with prices surging beyond $80 per barrel for Brent and $78.40 for WTI before retreating. The Strait of Hormuz, a critical chokepoint for global oil supply, remains a central concern, with analysts warning that any disruption could cause prices to skyrocket. Potential Iranian responses include direct military strikes, proxy attacks, or targeting regional oil infrastructure. The situation introduces volatility into energy markets and could reignite inflationary pressures globally, potentially impacting economic growth and forcing central banks to consider interest rate hikes. Gulf countries have called for restraint and a return to diplomatic dialogue.