Oil prices slide more than 3% as Trump signals more time for Iran diplomacy

Oil prices plummeted over 3% on Monday as President Donald Trump signaled his intention to extend diplomacy talks with Iran, alleviating worries about additional supply interruptions. The two major oil price indices declined by more than 3% in early trading. Brent crude, which accounts for two-thirds of global oil, was trading at $110 a barrel at 7:55 am UAE time. Meanwhile, West Texas Intermediate, the benchmark for US crude, fell to $100.90 a barrel.

According to reports, Trump confided in Israeli Prime Minister Benjamin Netanyahu during a phone call that he wished to provide more time for Iran diplomacy before contemplating further military actions. CBS News also quoted Trump as believing the US would ultimately conclude the war with Iran, either through a deal or through other means.

Speaking to Right Side Broadcasting Network before a campaign rally in Iowa, Trump expressed confidence in the upcoming resolution, stating, "We've had such a victory, and we'll put it away very soon, one way or the other."

Secretary of State Marco Rubio confirmed on Saturday that no decision had been made regarding renewed strikes, emphasizing Trump's preference for a diplomatic resolution. On Sunday, the UK Maritime Trade Operations reported receiving a statement about a potential missile strike on a ship in the Strait of Hormuz, following an attack on a liquefied natural gas tanker earlier in the week. Additionally, an Iranian delegation was in Qatar for discussions with mediators, as per a Bloomberg report.

The surge in oil prices over the past week, fueled by Hormuz strikes and a US threat to target Iran, had pushed both Brent and WTI to six-month highs. However, after this morning's decline, crude prices have eased, and analysts predict that they may remain elevated near $110 a barrel by year-end due to factors such as record freight costs, limited tanker capacity, and ongoing geopolitical uncertainties in the Middle East.