Global oil prices dropped sharply on Monday while stock markets across Asia posted gains, driven by growing optimism that a peace agreement could soon be reached between the United States, Israel, and Iran.
The positive market reaction followed comments by U.S. President Donald Trump, who announced on Saturday that negotiations with Tehran had progressed significantly and that further details on a potential agreement would be released soon. However, a day later, Trump urged his negotiating team not to rush the process, stressing the importance of reaching a carefully considered deal.
By Monday morning in Asia, the price of Brent crude oil had fallen by 5.5 percent to $97.90 per barrel, while U.S. crude dropped 5.8 percent to $90.99 per barrel. The decline reflects investor confidence that tensions in the Middle East could ease in the coming weeks.
One of the key issues reportedly under discussion is the reopening of the Strait of Hormuz, a vital maritime route through which nearly one-fifth of the world’s oil and liquefied natural gas supplies pass. The waterway has remained closed since the outbreak of hostilities on February 28, 2026, severely disrupting global energy markets.
The prospect of reopening the strait boosted investor confidence across Asia. Japan’s Nikkei 225 index climbed above the 65,000-point mark for the first time after gaining 2.9 percent. Countries such as Japan and South Korea, which depend heavily on energy imports from the Gulf region, have been among the hardest hit by the conflict.
Trump also revealed that he had held what he described as “very productive” discussions with leaders from Saudi Arabia, the United Arab Emirates, Qatar, and other regional partners regarding a possible peace framework.
In a social media post, Trump stated that the agreement had already been discussed extensively and that only final adjustments remained between the United States, Iran, and other parties involved. He added that more details would be made public soon.
The U.S. president also confirmed that he spoke with Israeli Prime Minister Benjamin Netanyahu on Saturday, describing the conversation as highly successful. Although Trump did not provide specific details about the proposed agreement, he reiterated that it would permanently prevent Iran from acquiring nuclear weapons.
On Sunday, Trump emphasized the need for patience, writing on Truth Social that all parties should take sufficient time to ensure the agreement is properly finalized and free of mistakes.
Iranian officials have acknowledged progress in recent talks but cautioned against expectations of an immediate breakthrough. Esmaeil Baqaei, spokesperson for Iran’s Ministry of Foreign Affairs, told state television that the two sides had moved closer on several issues but that significant differences remain unresolved. He also criticized what he described as contradictory statements from American officials.
Global energy markets have experienced significant volatility since March, when Iran threatened to target vessels attempting to navigate the Strait of Hormuz in response to military actions by the United States and Israel.
Despite Monday’s decline, oil prices remain considerably higher than pre-war levels. Before the conflict began, crude oil was trading at approximately $70 per barrel.
The war has also seen Iran launch attacks against Israel and several Gulf states allied with Washington, including Saudi Arabia, Bahrain, and the United Arab Emirates.
A temporary ceasefire reached in early April paved the way for direct negotiations between Washington and Tehran aimed at securing a lasting peace settlement.
Saul Kavonic, Head of Energy Research at MST Financial, said signs of progress are encouraging for global markets.
“There is now growing optimism that this crisis may be approaching a resolution, which could lead to lower oil prices in the short term,” he said.
However, Kavonic warned that even under the most favorable scenario, global oil markets are likely to remain under pressure until at least 2027 due to the time required to restore shipping operations through the Strait of Hormuz, repair damaged infrastructure, and rebuild depleted oil inventories.