US-Iran Tensions Ease as De-escalation Expectations Rise; International Oil Prices Plunge Over 10% in Single Day

Affected by signs of easing in the Middle East situation, international oil prices plummeted sharply on Monday. U.S. President Trump stated that after “productive dialogue” with Iran, he would delay plans to strike Iran’s electricity and energy infrastructure, sparking market optimism for a de-escalation of the conflict.

CITIC Securities APP reports that data shows that Brent crude oil futures for May delivery fell 10.9% on Monday, closing at $99.94 per barrel, the lowest since March 11, and the largest single-day decline since March 10. U.S. WTI crude oil May contracts also dropped 10.3%, closing at $88.13 per barrel.

Trump said on social media that the U.S. and Iran have engaged in “very good and productive” talks to “fully resolve the conflict,” and announced a five-day delay in military strikes on Iran’s electricity and energy facilities, depending on the progress of negotiations. Previously, the conflict had lasted over three weeks.

However, market opinions on the situation remain divided. Naeem Aslam, Chief Investment Officer at Zaye Capital Markets, pointed out that the U.S. delay does not mean Israel will also hold back, and there are reports that Israel has actually increased attacks on Iran. Amid conflicting reports, he said he would not easily short oil.

Notably, Trump threatened over the weekend to intensify strikes on Iran’s energy infrastructure, while Iran’s parliament speaker warned of retaliatory actions in the region. On Monday, Trump also refuted reports from Iranian media that “no talks are taking place,” stating that negotiations “took place last night,” and hinted that an agreement could be reached within five days.

Analysts believe that current oil price movements are highly dependent on political statements. Michael Lynch, President of Strategic Energy & Economic Research, said the market is almost entirely driven by Trump’s remarks, although the actual progress of negotiations remains unclear, and he has signaled a willingness to reach an agreement. If negotiations do not truly advance, oil prices could quickly rebound above $100.

In the medium to long term, even if the Middle East conflict eases, the room for oil price decline may be limited. Kathleen Brooks, Research Director at XTB, pointed out that it will take time for energy infrastructure in the Persian Gulf region to recover, so Brent crude prices are unlikely to return to the $60-$70 range in the short term.

Meanwhile, as oil prices sharply fell, the U.S. stock market rebounded strongly on Monday, with the three major indices rising over 1%. However, over the past four weeks, the Dow has fallen 8.2%, the S&P 500 has declined 5.8%, and the Nasdaq has dropped 5.4%, indicating that the market has not yet fully recovered from previous adjustments.