Oil prices tumbled sharply on Monday while European stock markets staged a recovery after US President Donald Trump announced a halt to planned strikes on Iranian energy infrastructure, citing “very good” talks with Tehran.
Earlier in the day, crude had inched higher by around one per cent, but Trump’s announcement triggered a dramatic reversal, sending oil prices down by as much as 14 per cent. By 11:45 GMT, Brent crude, the international benchmark, had fallen 6.7 per cent to $104.70 per barrel, while West Texas Intermediate (WTI) dropped 6.9 per cent to $91.41 per barrel after briefly rising above $100.
The sharp decline in oil coincided with a rebound in European equities. Frankfurt’s stock exchange climbed 1.5 per cent by midday, while Paris gained one per cent, recovering from earlier losses of roughly 2.5 per cent caused by escalating tensions between the US and Iran over the strategic Strait of Hormuz. London’s FTSE 100 index remained largely flat, weighed down by declines in energy giants BP and Shell.
Trump, writing in all capital letters on his Truth Social platform, described the recent diplomatic exchanges as “very good and productive conversations regarding a complete and total resolution of our hostilities in the Middle East.” His comments reassured investors that immediate military action was off the table, easing fears of a disruption to global oil supplies and contributing to the stock market recovery.
The market movements reflect the ongoing volatility tied to geopolitical tensions in the Gulf, where Iran and the United States have repeatedly traded threats. Analysts note that while the pause in strikes calmed markets temporarily, oil prices remain sensitive to any further developments in US-Iran relations, particularly around the Strait of Hormuz, a key chokepoint for global energy shipments.
