Global oil prices tumbled on Monday after United States President Donald Trump said Washington was holding “good talks” with Iran, raising hopes of a diplomatic breakthrough following the suspension of a two-week bombing campaign against the Islamic Republic.
Brent crude, the international oil benchmark, fell by about 8.2 per cent to below $90 per barrel after dropping as low as $87.55 during trading. The decline came after prices briefly climbed above $100 per barrel last week amid heightened tensions in the Middle East.
Reuters quoted Trump as saying there was a good chance of reaching an agreement with Tehran but warned that the United States would resume military action if negotiations failed.
“We’re talking right now. We’re having good talks. I think there’s a good chance that something could happen, and if it does, good; if it doesn’t, we go back to doing what we were doing two days ago,” Trump said.
The latest comments followed Washington’s decision on Saturday to suspend its air strikes on Iran after 13 consecutive nights of bombing.
Despite Trump’s optimism, tensions remained high across the region. Saudi Arabia said it intercepted drones targeting petroleum facilities, including sites in the capital, Riyadh. According to Saudi authorities, the drones were launched from Iraq by Iran-backed armed groups, adding that the kingdom reserved the right to respond.
Iran-backed Houthi rebels in Yemen also claimed responsibility for targeting Saudi Arabia’s East-West Pipeline, which transports crude oil to the Red Sea port of Yanbu. The group said the attack was in retaliation for alleged Saudi drone incursions into Yemeni airspace.
Meanwhile, Iran insisted it had not requested a resumption of peace negotiations with the United States. Foreign Ministry spokesman Esmail Baghaei dismissed reports suggesting Tehran had sought talks, describing them as fabricated.
“This is not in our DNA,” Baghaei said, while noting that messages continued to be exchanged through mediators and that Iran had not abandoned diplomacy.
Tehran also maintained that it remained in control of the Strait of Hormuz, a critical shipping route through which about a fifth of global oil supplies pass, despite Washington’s demand that vessels move freely through the waterway.
According to Iranian state media, authorities turned back six ships on Monday that allegedly attempted to transit the strait without permission.
Reuters reported that Trump’s decision to halt the bombing campaign followed advice from senior military commanders, who reportedly concluded that the strikes had reached the limits of what they could achieve. A US official told the news agency that commanders had expressed concerns over dwindling targets and the depletion of air munitions.
The sharp decline in crude prices could provide some relief to oil-importing countries if sustained, although analysts said the market remained vulnerable to renewed geopolitical tensions should the ceasefire collapse.
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