Crude oil prices dropped more than 4% on Sunday as traders reacted to President Donald Trump's comments suggesting progress in negotiations with Iran to reopen the Strait of Hormuz.
West Texas Intermediate (WTI) futures fell nearly 5% to $92.05 per barrel, signaling a sharp repricing of geopolitical risk in the region.
The decline follows reports that Trump indicated a deal with Iran is nearing finalization, which could ease concerns about shipping disruptions in the critical energy corridor.
The Strait of Hormuz, a key global oil transit route, has been a focal point of tensions between the U.S. and Iran, with any disruption historically causing significant volatility in energy markets.
The broader market reaction highlights the sensitivity of oil prices to geopolitical developments.
With the Strait of Hormuz at the center of recent diplomatic efforts, the potential for a resolution has led to a rapid unwinding of risk premiums built into crude prices.