Oil prices fell by nearly five per cent in early Asian trading on Monday after US President Donald Trump announced fresh negotiations with Iran aimed at ending the Middle East conflict and reopening the Strait of Hormuz.
The conflict, which began in late February following attacks on Iran by the United States and Israel, has triggered sharp volatility in global oil markets after disrupting traffic through the Strait of Hormuz, a key shipping route for the world’s oil and gas supplies.
As of about 2250 GMT on Sunday, Brent crude for September delivery declined 4.69 per cent to $83.81 per barrel, while US benchmark West Texas Intermediate (WTI) dropped 4.67 per cent to $80.72 per barrel.
Trump said on Sunday that negotiations with Iran would begin on Monday after his administration suspended plans for major strikes against the Islamic Republic in favour of a diplomatic solution.
“Now what we’re doing is we’re talking to them in the form of a negotiation. It begins tomorrow afternoon,” he said, without disclosing the venue or the participants in the talks.
The announcement came hours after Washington shelved plans for major military action against Iran. Meanwhile, Tehran said on Sunday that it was close to reaching an agreement with Oman on a new route through the Strait of Hormuz, raising hopes of easing disruptions to global energy supplies.
