Global crude oil prices saw a significant decline, hitting a two-week low on Monday. This drop was attributed to growing optimism regarding potential progress in talks between the US and Iran, which alleviated concerns about extended supply disruptions in West Asia.
The international oil benchmark Brent crude plummeted by 6%, slipping below the $100-per-barrel threshold. Similarly, US West Texas Intermediate (WTI) crude also fell over 6% to $90.33 in early trading, marking their lowest levels since early May.
The recent decrease in oil prices followed remarks by US President Donald Trump hinting at substantial advancements in discussions with Tehran towards a peace agreement. This development is aimed at reducing tensions in the region and reopening the vital Strait of Hormuz.
Analysts observed that the dip in crude prices below $100 per barrel reflects market expectations of a potential US-Iran deal, which could have significant implications for global markets. However, uncertainties persist as critical issues remain unresolved, with the US not rushing to finalize an agreement.
Leading global brokerages cautioned that the oil market remains susceptible to disruptions if the situation in the Strait of Hormuz prolongs. The strait, a crucial energy route, previously handled a substantial portion of global oil and liquefied natural gas shipments before recent conflicts disrupted supplies.
