Oil drops 7% as Washington and Tehran resume negotiations

Oil prices fell by approximately 7 percent on Monday, following U.S. President Donald Trump’s announcement that the United States and Iran would resume negotiations, as he expressed optimism about the possibility of reaching an agreement between the two sides. Brent crude, the global benchmark, dropped by about 7 percent to $83.91 per barrel by 07:50 GMT, while West Texas Intermediate crude fell to around $80 per barrel.

The decline came amid growing hopes for the resumption of diplomatic efforts, which eased concerns about further disruptions to energy supplies from the Middle East. Earlier on Monday, Trump stated that consultations conducted by Washington with Saudi Arabia, the United Arab Emirates, Qatar, and Iran had led him to halt a large-scale attack that had been planned for the weekend. He also renewed his call for the reopening of the Strait of Hormuz, one of the world’s most critical oil transit routes, as soon as possible.

Brent crude had risen by approximately 25 percent during July, driven by escalating tensions between the United States and Iran and fears of disruptions to oil supplies through the Strait of Hormuz and the Red Sea.

On the other hand, the OPEC+ group announced on Sunday evening a new, limited increase in production quotas of 188,000 barrels per day, effective from September, completing its plan to restore production cuts that began implementing in 2023.

The region has seen escalating tensions since the outbreak of military confrontations between the United States and Iran in late February. Negotiations that began after the signing of a memorandum of understanding between the two sides on June 18 have stalled due to disagreements over freedom of navigation in the Strait of Hormuz, through which approximately 20 percent of global oil and liquefied natural gas trade passes.