Oil prices fall 7% after Trump says Iran talks are 'proceeding nicely'

On Monday, crude oil prices experienced a 7% decline as the United States and Iran demonstrated potential advancements towards reaching an agreement aimed at terminating their three-month conflict and reopening the vital Strait of Hormuz, albeit with an unclear timeline for such a resolution.

Brent crude, the international benchmark, saw a decrease of approximately 7%, closing at $96.14 per barrel. In parallel, West Texas Intermediate futures fell by more than 6%, settling at $90.30 per barrel.

President Donald Trump took to social media on Monday to announce that he had urged several nations, including Saudi Arabia, Qatar, Pakistan, Turkey, Egypt, and Jordan, to join the Abraham Accords and establish diplomatic ties with Israel amid the ongoing negotiations with Iran.

The President remarked that discussions with Iran were "proceeding nicely," while also cautioning that the U.S. might revert to offensive measures should these discussions fail to yield results.

"It will only be a Great Deal for all or, no Deal at all," Trump stated.

Simultaneously, Iran's chief negotiator and foreign minister convened with Qatar’s Prime Minister Mohammed bin Abdulrahman bin Jassim Al Thani to deliberate on a potential agreement to conclude the ongoing conflict.

Deal or no deal?

On Saturday, President Trump indicated that a deal with Iran concerning the reopening of Hormuz, among other matters, was nearly finalized and would be disclosed shortly. However, the President has previously hinted at resolutions that did not materialize, resulting in heightened tensions and subsequent oil price increases.

Last week, U.S. crude prices declined by more than 8%, while Brent dropped over 5%. This followed Trump’s announcement of his decision to suspend impending airstrikes against Iran to afford more time for negotiations. Since the onset of hostilities following U.S. and Israeli airstrikes that targeted Iran on February 28, prices have surged by more than 30%.

Since early March, Iran has enacted a de facto blockade on shipping through the Strait of Hormuz, mandating that vessels obtain its authorization to transit or face potential attacks. This blockade was implemented in response to the U.S. and Israeli actions that resulted in the death of Iran's leader, Ayatollah Ali Khamenei, alongside other high-ranking officials.

The Strait of Hormuz is a critical chokepoint for global oil supply, with approximately 20% of the world's oil traversing this sea route prior to the conflict. The blockade by Iran has severely curtailed oil exports from the Middle East, causing the most significant supply disruption in history.

In retaliation, the U.S. has enforced a blockade on Iran's ports and vessels. Trump noted on Sunday that the U.S. blockade would remain "in full force and effect until an agreement is reached, certified, and signed."