Oil prices fell approximately 6% to two-week lows on Monday. Brent crude futures declined to around $97.69 a barrel. U.S. West Texas Intermediate (WTI) dropped to about $90.85.
Growing optimism for a U.S.-Iran peace agreement triggered the sell-off. President Donald Trump stated over the weekend that the two sides have largely negotiated an understanding.
A key component of the negotiations involves reopening the Strait of Hormuz. This critical chokepoint handled nearly one-fifth of global oil and LNG shipments before the recent conflict.
Analysts remain cautious as significant hurdles and key disagreements persist. The market reaction reflects a reduction in the geopolitical risk premium that previously inflated prices. A successful deal would significantly ease global supply concerns.