Brent crude fell to $90 a barrel on Monday, retreating from recent highs as US President Donald Trump warned of a "powerful" return to war in the Middle East.
The price pullback occurred even as Trump issued stern rhetoric regarding Iran, suggesting that markets are beginning to discount the likelihood of immediate, large-scale military escalation despite the heightened diplomatic tension.
The drop in oil prices comes after a period of volatility driven by fears of a prolonged closure of the Strait of Hormuz.
While Trump’s comments have reignited concerns about regional stability, the failure of oil to rally on the news indicates that traders are prioritizing demand-side uncertainties and the potential for a negotiated de-escalation over supply disruption risks.
The FTSE 100 also opened in negative territory, reflecting broader risk-off sentiment among European investors.
This development follows a series of warnings from the US administration, including threats to "take over" Iran following recent military strikes.