Oil prices slumped nearly 5% in Asian trade on Monday, falling to their lowest levels in three weeks after U.S. President Donald Trump said negotiations with Iran would resume later in the day after he called off a planned attack on the country.

As of 20:46 ET (00:46 GMT), Brent Oil Futures expiring in October fell 4.8% to $83.68 per barrel, while West Texas Intermediate (WTI) crude futures declined 4.9% to $80.50 per barrel.

Both contracts slipped more than 5% last week, but marked a monthly jump of more than 20% in July.

President Trump on Sunday said he had called off a massive planned U.S. military strike on Iran after Tehran and several Middle Eastern countries requested time for negotiations.

He said talks would begin on Monday and that discussions were aimed at reopening the Strait of Hormuz and ensuring Iran abandons its nuclear ambitions.

Oil prices had risen briefly last week as the conflict spread beyond the Gulf, stoking fears of wider disruptions to regional energy infrastructure and shipping.

Iran-backed groups launched drone attacks on Saudi oil facilities, while strikes hit natural gas vessels at Egypt’s Damietta port and targeted shipping routes in both the Strait of Hormuz and the Red Sea, raising concerns that the conflict was expanding to multiple energy transit chokepoints.

The escalation briefly pushed Brent crude above $90 a barrel.

The decline in crude was reinforced by OPEC+’s decision on Sunday to raise production quotas by about 188,000 barrels per day from September, completing the unwinding of a layer of voluntary output cuts introduced in 2023.

While previous quota increases had little impact because of supply disruptions in Iran, Russia and Kazakhstan, the latest move signaled the producer group remains committed to gradually restoring output as geopolitical risks show signs of easing.

Source: Investing.com

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