Oil Prices Drop Below $100 as Hopes Rise for U.S.-Iran Peace Agreement

Oil prices tumbled sharply during early Asian trading on Monday as optimism surrounding a possible U.S.-Iran peace agreement eased concerns over global crude supply disruptions. Brent crude futures for July delivery plunged more than 5%, falling to $98.12 per barrel and marking their lowest level in nearly three weeks. Meanwhile, West Texas Intermediate (WTI) crude futures dropped 5.2% to $91.31 per barrel.

The sharp decline in oil prices came after U.S. President Donald Trump stated over the weekend that a memorandum of understanding tied to a peace agreement with Iran had been “largely negotiated.” The proposed deal is reportedly aimed at reopening the strategically important Strait of Hormuz, a key global shipping route for crude oil exports.

Market sentiment improved further after reports suggested that both U.S. and Iranian representatives, along with Pakistani mediators, had made progress in negotiations. However, Iranian state media pushed back against Trump’s comments, denying claims that a final agreement was close.

Trump later clarified that Washington was not rushing to finalize a deal with Tehran. He also confirmed that a naval blockade against Iran would remain in place until both sides reached a formal agreement. Major disagreements continue over Iran’s nuclear program, with Tehran refusing U.S. demands to surrender its enriched uranium stockpiles.

Despite the recent sell-off, analysts noted that oil markets remain supported by limited flows through the Strait of Hormuz. Shipping activity through the critical passage is still significantly below pre-conflict levels, continuing to tighten global crude supply and helping prevent even steeper declines in oil prices.

Investors are closely monitoring developments surrounding the Iran conflict, global crude supply conditions, and geopolitical risks, all of which are expected to remain major drivers of oil market volatility in the coming weeks.