Global oil prices fell sharply on Monday as diplomatic developments between the United States and Iran raised hopes of a possible end to the ongoing Middle East conflict.
Brent crude futures for January delivery declined 3.94% to $108.96 per barrel, while US West Texas Intermediate (WTI) crude futures for December delivery dropped 4.17% to $99.78 per barrel as of 7:30 a.m. ET.
The decline came after US and Iranian officials signaled that diplomatic efforts could help resolve the conflict and reduce the risk of further military escalation.
US Secretary of State Marco Rubio said President Donald Trump preferred a diplomatic solution with Iran rather than military action. He added that Trump had not yet made a decision regarding further military operations but remained confident in the US military’s ability to respond if necessary.
Meanwhile, Iranian officials indicated that an agreement remained possible following two days of talks mediated by Qatar. However, they stressed that any deal would depend on whether the demands were implemented in practical terms.
The diplomatic developments come amid reports that Washington and Tehran are preparing for possible renewed military action after the November 3 US midterm elections.
Iranian Supreme Leader Mojtaba Khamenei also called on the country’s armed forces to respond immediately to any threat.
Despite the recent decline in oil prices, continued attacks on shipping routes and refineries in the Middle East, alongside geopolitical tensions involving Ukraine, are keeping uncertainty high in global energy markets.
