Oil prices dropped sharply in Asian trading on Monday, with Brent crude slipping below the $100-per-barrel mark as optimism grew around a possible peace agreement between the United States and Iran.
Brent crude futures for July delivery fell around 4% to $99.41 per barrel, while U.S. West Texas Intermediate (WTI) crude declined 4.3% to $92.48 per barrel. Both benchmarks later recovered slightly after touching their lowest levels in nearly three weeks.
Market sentiment shifted after U.S. President Donald Trump stated that negotiations with Iran were “largely completed,” raising hopes for easing tensions in the region. Reports also suggested that Pakistani mediators and officials from both countries had made progress in discussions. However, Iranian state media denied claims that a final agreement was close.
Trump later clarified that there was “no urgency” to finalize a deal and confirmed that naval restrictions on Iran would remain in place until an official agreement is reached.
Major disagreements continue between Washington and Tehran, especially over Iran’s nuclear program. Iran has resisted U.S. demands regarding its enriched uranium stockpiles, while Trump repeated that Iran must never obtain nuclear weapons. He also hinted at possible military action through several social media posts over the weekend.
Despite the recent selloff, oil prices found some support because shipping activity through the Strait of Hormuz remains heavily disrupted. The strategic waterway, which normally handles nearly 20% of global oil supplies, stayed largely closed on Monday.
Reports also indicated that Iran may introduce new charges for commercial vessels passing through Hormuz, potentially increasing tensions with the United States. Analysts believe it could take several months before oil transportation through the region fully returns to normal levels.