Oil prices retreated on Monday as markets reacted to news of a potential de-escalation in the Middle East. West Texas Intermediate crude fell about 6.2% to roughly $79.45 per barrel. Brent crude also dropped, trading down over 3.5% at approximately $79.30 per barrel.
President Trump announced he is pausing plans for new military strikes against Iran. He cited progress toward an agreement with regional allies intended to secure the Strait of Hormuz and address nuclear concerns. Officials expect initial negotiations to commence Monday afternoon.
Despite the positive market reaction, reports from Tehran suggest that no direct discussions with the United States are currently scheduled. Iranian spokespeople stated that they are only engaged in ongoing talks with Oman regarding the management of the critical shipping lane.
Prior to this announcement, oil had reached prices above $110 per barrel this year as the conflict threatened global supply chains. The current drop provides some relief to energy markets that have dealt with significant volatility and elevated fuel costs for households over recent months. Gas prices in the United States reached an average of $4.095 per gallon as of Monday, representing a 30% increase compared to last year.