Oil prices fell sharply Monday on hopes that a deal could bring an end to the US-Israel war with Iran, with global benchmark Brent dropping 5.5% to $97.90 a barrel before stabilizing around $97.70 in afternoon trading.
The decline comes as negotiators from Washington and Tehran continue talks aimed at ending hostilities that began on February 28, when the Strait of Hormuz effectively closed to shipping. The strait normally carries roughly one-fifth of the world's oil and liquefied natural gas.
President Donald Trump said negotiations were "proceeding nicely" but added the outcome would be either "a great deal for all or no deal at all." Earlier, Trump had instructed negotiators "not to rush into a deal" after suggesting an agreement was close.
Secretary of State Marco Rubio, speaking from New Delhi, described the talks as still being "a work in progress," saying officials had expected news overnight but it had not yet materialized. His comments came before Iran's foreign ministry spokesman said agreement had been reached on a "large portion" of issues under discussion.
What the Left Is Saying
Progressive Democrats have largely welcomed signs of diplomatic progress, with many arguing that continued military confrontation would only deepen economic pain for American consumers already grappling with elevated fuel prices.
Senator Chris Murphy of Connecticut wrote on social media that "any pathway to de-escalation in the Middle East is worth pursuing," calling for diplomacy to remain the primary tool for resolving tensions. The senator has previously argued that US military involvement in the region carries unsustainable costs and risks broader regional instability.
Humanitarian organizations have noted that the conflict has created significant displacement and civilian suffering, with peace advocates arguing that a negotiated settlement represents the only viable path toward addressing humanitarian needs in the region.
Some progressive voices have expressed caution about the terms of any potential deal, stressing that normalization agreements must address concerns about human rights and regional security comprehensively rather than simply reopening shipping lanes.
What the Right Is Saying
Republican lawmakers have praised Trump's handling of negotiations while emphasizing that any agreement must protect US strategic interests and Israel's security.
Senator Lindsey Graham of South Carolina said Trump had demonstrated "strong leadership" in pursuing diplomatic solutions while maintaining pressure on Iran. "The president has kept all options on the table," Graham said, noting that the threat of military action helped bring Tehran to the negotiating table.
Conservative foreign policy commentators have argued that reopening the Strait of Hormuz represents a critical priority for global economic stability. The Abraham Accords framework, which Trump discussed pushing Gulf leaders to sign, represents a key element of the administration's regional strategy aimed at normalizing relations between Israel and Arab nations.
Some Republican voices have urged caution about declaring victory prematurely, noting that previous negotiations with Iran under other administrations failed to produce lasting agreements. They argue that any new deal must include robust verification mechanisms and clear consequences for violations.
What the Numbers Show
The 5.5% decline in Brent crude to $97.90 per barrel represents a significant single-day drop but comes after weeks of elevated prices driven by uncertainty over the Strait of Hormuz closure. Before hostilities began, Brent was trading at approximately $70 a barrel, meaning current prices remain roughly 40% higher than pre-conflict levels.
The Strait of Hormuz carries about 20% of global oil and LNG shipments. Shipping industry analysts note that even if a deal is announced, returning to normal operations would take months due to potential sea mines, damaged infrastructure, and the need to rebuild depleted global oil stocks.
Analyst Saul Kavonic of MST Financial said markets are seeing "light at the end of the tunnel" for near-term price relief but cautioned that "oil markets will remain tight through 2027 given the time required to normalize flows through the Strait, repair damaged facilities, and rebuild global oil stocks."
Japan's Nikkei 225 stock index rose above 65,000 for the first time Monday, gaining 3% on hopes of an imminent reopening. Japan and South Korea have been particularly affected by the conflict due to heavy reliance on Gulf energy imports.
The Bottom Line
The drop in oil prices reflects genuine market optimism that a negotiated end to the US-Israel-Iran conflict may be within reach, potentially reopening one of the world's most critical shipping chokepoints. However, both sides caution that significant work remains before any formal agreement is signed.
For American consumers, lower pump prices could follow if negotiations succeed and Strait traffic resumes at normal levels. But analysts warn that pre-conflict price levels are unlikely to return quickly even in a best-case scenario, given the time needed for infrastructure repairs and supply chain normalization.
The coming days will test whether negotiators can bridge remaining gaps between US demands for nuclear safeguards and security guarantees and Iran's calls for sanctions relief and respect for its sovereignty. Trump has said final details are "currently being discussed" and will be announced shortly.