Crude prices fell over 3% after the US paused military action and signaled diplomatic efforts with Iran to ease tensions.
Benchmark crude oil futures slid to their lowest level in over a week, dropping more than 3% on Monday. The decline followed the US decision to suspend planned airstrikes against Iran over the weekend, coupled with President Trump’s statement that the two nations were engaged in discussions to de-escalate the conflict.
Prices had rallied earlier in June on rising geopolitical risks in the Middle East, including attacks on oil tankers and Iran’s downing of a US drone. Analysts had warned of supply disruptions if tensions escalated further, but the pause in military action reduced immediate fears of a broader conflict.
Markets reacted swiftly to the shift in tone, with traders paring back risk premiums built into oil prices. The move also weighed on energy stocks, though broader equity markets remained largely unaffected.