Oil Falls Below $80 as Trump Suspends Planned Strike on Iran

Crude oil prices fell about 5% on Monday, dropping below $80 per barrel, after U.S. President Donald Trump said he had suspended a planned military strike on Iran and announced that new diplomatic efforts with Tehran would begin.

According to President Trump, regional allies, including Saudi Arabia, encouraged Washington to pursue diplomacy, leading to the decision to halt the planned operation while negotiations continue over reopening the Strait of Hormuz, one of the world’s most important oil shipping routes.

Iran denied holding direct negotiations with the United States but said discussions with Oman were progressing and aimed at improving maritime traffic through the strategic waterway.

The decline in oil prices also coincided with developments supporting global supply. Turkey and Iraq agreed to extend a key cross-border oil pipeline agreement by one year, preserving an important alternative export route for crude shipments.

In Kazakhstan, crude intake through the Caspian Pipeline Consortium (CPC) resumed after a temporary suspension, although exports remain exposed to security risks following recent drone attacks targeting oil tankers.

Separately, OPEC+ approved another modest increase in oil production, completing the gradual restoration of supply cuts that were first introduced in 2023.

The combination of renewed diplomatic efforts, improving export flows and additional OPEC+ production helped ease concerns over near-term supply disruptions, contributing to the sharp decline in crude prices.