Global oil prices plunged by more than four per cent on Monday as optimism over a possible diplomatic resolution to tensions involving Iran eased fears of disruptions to global crude supplies.
Market data showed that Brent crude dropped 4.5 per cent to $118.30 per barrel, while United States West Texas Intermediate (WTI) crude declined 4.37 per cent to $99.57 per barrel.
The sharp decline followed a third consecutive day of talks involving Iranian and Qatari officials aimed at advancing negotiations over the conflict, which has fueled concerns about oil exports and shipping activities across the Middle East.
Analysts said growing confidence in diplomatic efforts helped calm market anxiety, reducing speculation over potential supply shortages.
Iranian Foreign Minister Abbas Araqchi stated that negotiations were “ongoing and progressing,” noting that discussions with Qatari mediators would continue while Tehran remained prepared for both diplomatic engagement and self-defence.
The diplomatic push has also reportedly received support from the United States. Reports indicate that President Donald Trump favoured allowing negotiations to continue rather than pursuing renewed military action.
According to Axios, Trump conveyed his preference for diplomacy during discussions with Israeli Prime Minister Benjamin Netanyahu. US Secretary of State Marco Rubio also stated that no decision had been taken regarding further military strikes and that the US administration remained focused on seeking a negotiated solution.
While attacks on vessels near the Strait of Hormuz continue to raise concerns over maritime security, the latest market reaction suggests investors are increasingly betting on diplomacy to prevent a wider regional escalation.
Despite the drop in prices, analysts caution that tensions in the Middle East remain a key factor influencing global energy markets and could trigger renewed volatility if negotiations fail to produce a lasting agreement.
