Oil Prices Drop as US-Iran Tensions Ease Over Hormuz

Oil prices decreased on Monday following a pause in hostilities between the United States and Iran, which raised hopes for a return to ceasefire and negotiations concerning the Strait of Hormuz. After 13 days of attacks on Iranian sites, the United States refrained from further strikes over the weekend, with Donald Trump’s UN envoy indicating that President Trump was “giving talks some space.” In response, Iran announced it would halt its retaliatory attacks on neighboring countries, providing relief to Gulf shipping and the oil sector.

The conflict had escalated earlier in the month, disrupting diplomatic efforts after Iran attacked ships in Omani waters. Crude prices had surged, with Brent crude exceeding $100 a barrel last week.

However, news of ongoing shipping in the Red Sea helped investors reduce gains. Iran's foreign ministry spokesman, Esmaeil Baqaei, stated that discussions with Oman focused on “common principles and operational mechanisms” to ensure safe passage through the Strait of Hormuz.