Global oil prices plunged nearly five percent on Sunday after United States President Donald Trump said negotiations with Iran were progressing in a “constructive” manner, raising hopes of easing tensions and eventual restoration of disrupted energy supplies.
Brent crude futures dropped by more than 4.5 percent to around $98.8 per barrel, while US West Texas Intermediate (WTI) crude fell nearly 4.7 percent to about $92 per barrel, pushing both benchmarks to their lowest levels in nearly two weeks.
The decline followed Trump’s remarks indicating that Washington and Tehran had largely negotiated a memorandum of understanding aimed at reopening the Strait of Hormuz, one of the world’s most critical oil transit routes.
Despite the optimism, Trump cautioned against rushing the negotiations and said the process remained incomplete. He also indicated that restrictions and maritime pressure measures would remain in place until a formal agreement is finalized.
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Oil markets reacted swiftly to signs of diplomatic progress, as traders anticipated that reduced geopolitical risk could improve crude supplies from the Middle East and gradually normalize shipping through the Strait of Hormuz.
The waterway carries nearly one-fifth of global oil and liquefied natural gas shipments and has remained heavily disrupted following months of regional conflict and security tensions.
Analysts said markets were responding to expectations rather than confirmed supply recovery.
While prospects of a deal have improved investor sentiment, energy experts cautioned that restoration of full shipping and oil infrastructure operations may take months even if an agreement is reached. Damage to facilities, security concerns and logistical challenges continue to cloud the outlook.
Oil prices had surged sharply earlier amid fears of prolonged conflict and disruption to Middle East energy flows, making Sunday’s slide one of the sharpest recent market reactions to diplomatic developments.
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