Brent crude oil prices fell sharply in early Monday trading, dropping 4.66% to $92.27 a barrel, while US West Texas Intermediate (WTI) crude declined 5.02% to $84.83.
The steep retreat followed reports that the United States and Iran have paused military strikes in the Persian Gulf, effectively halting the escalation that had driven energy markets to two-month highs earlier in the week.
Brent crude had briefly touched $102 a barrel last week amid fears that sustained military action could disrupt one of the world’s most critical energy chokepoints.
The price correction reflects a rapid unwinding of the geopolitical risk premium that had accumulated as tensions over the Strait of Hormuz intensified.
Brent crude had briefly touched $102 a barrel last week amid fears that sustained military action could disrupt one of the world’s most critical energy chokepoints.
The decision by both sides to refrain from further strikes has immediately alleviated concerns about a prolonged blockade or significant supply disruption.
This development marks a significant de-escalation in a conflict that had threatened to derail ongoing negotiations aimed at restoring full shipping access through the strait.