Oil prices experienced a sharp decline on Monday after U.S. President Donald Trump announced that he had called off a planned military strike on Iran. This development shifted market sentiment as West Texas Intermediate (WTI) futures dropped roughly 5% to close at $80.34 per barrel, while Brent crude decreased nearly 4.7%, ending the day at $83.77 per barrel. The moves came amid heightened tensions in the region and concerns over potential disruptions in the Strait of Hormuz, a critical passage for global oil shipments.

Trump revealed that the decision to halt the strike was influenced by requests from Iran and other Middle Eastern countries. In a Truth Social post, he indicated that preliminary agreements had been reached, including the complete reopening of the Strait of Hormuz and a cessation of Iran's nuclear threat. The president also mentioned that the U.S. and Iran were scheduled to hold talks on Monday aimed at finding a broader resolution to escalating hostilities that have persisted since February 28.

However, Iranian officials denied that any direct negotiations with Washington were planned. According to Tehran’s Foreign Ministry spokesman Esmaeil Baghaei, the discussions were limited to routing and navigation issues in cooperation with Oman, not political or diplomatic talks with the United States. Despite this, Trump maintained that the conversations reflected progress towards resolving longstanding problems caused by Iran’s actions.

This easing of tensions and diplomatic signals contributed to the reversal in oil prices, which had been elevated due to concerns over conflict and supply disruptions. The market responded quickly to Trump’s announcement, reflecting the persistent sensitivity of oil prices to geopolitical developments in the Middle East. The situation remains fluid, with traders closely watching any further updates on the U.S.-Iran relationship and the status of the Strait of Hormuz.