Oil prices crashed in early Asian trading on Monday after US President Donald Trump announced that Washington would resume negotiations with Iran, raising hopes of an end to the Middle East war and the reopening of the Strait of Hormuz.
Brent crude, the international benchmark, fell 4.69 per cent to $83.81 per barrel for September delivery at about 2250 GMT on Sunday. West Texas Intermediate, the US benchmark, dropped 4.67 per cent to $80.72 per barrel.
The slide came after Trump revealed on Sunday that fresh talks with Iran would kick off on Monday.
The President said he had held off on major military strikes against Tehran to give diplomacy a chance.
“Now what we’re doing is we’re talking to them in the form of a negotiation. It begins tomorrow afternoon,” he said, without disclosing the location of the talks or naming the parties involved.
The war, which broke out in late February after US and Israeli forces struck Iran, has rattled global oil markets and disrupted the Strait of Hormuz — one of the world’s most vital routes for shipping crude oil and natural gas. Any extended closure of the waterway has stoked fears of supply shortages and rising fuel costs worldwide.
Iran, meanwhile, said on Sunday it was nearing a deal with Oman to establish an alternative route through the strait. The announcement came just hours after the US paused planned strikes on Iran as diplomatic momentum built.
Analysts say a reopened Hormuz corridor — or a viable alternative route — could relieve pressure on global energy supplies and shape oil price movements in the days ahead.
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