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In a dramatic turn that has reshaped energy markets overnight, U.22. President Donald Trump announced on Monday that the United States and Iran have engaged in "very good and productive conversations" aimed at achieving a complete resolution to hostilities in the Middle East.
The unexpected revelation, shared via a post on Truth Social, led to an immediate and sharp decline in global oil prices, providing relief to consumers and businesses amid weeks of escalating conflict-driven volatility.
President Trump stated that, following these discussions over the past two days, he had directed the U.S. Department of War to postpone any planned military strikes on Iranian power plants and energy infrastructure for a five-day period.
This pause is intended to allow ongoing talks to progress, with negotiations set to continue throughout the week. The President emphasized that a successful deal could reopen the critical Strait of Hormuz "very soon," potentially causing oil prices to "drop like a rock" in the aftermath.
The market reaction was swift and substantial. Brent crude, the global benchmark, had reached highs near $113–$114 per barrel earlier in the day amid fears of prolonged supply disruptions from the region.
Following Trump's announcement, prices plunged by as much as 10–14% in intraday trading, with Brent settling around $96–$104 per barrel in partial recovery. West Texas Intermediate (WTI) crude similarly fell below $90 per barrel at points, down from levels above $100.
The surprise remarks came after recent heightened tensions, including Trump's prior ultimatum demanding the reopening of the Strait of Hormuz within 48 hours or face severe consequences, and Iran's retaliatory warnings. Markets had priced in significant risk premiums due to potential threats to global energy flows through this vital chokepoint.
While Iran's foreign ministry has denied the existence of such negotiations labeling reports as "fake news" intended to manipulate markets Trump's statement nevertheless triggered a broad relief rally. Stock markets rebounded strongly, with U.S. and European indices climbing as investors shifted away from safe-haven assets toward risk-on sentiment.
"This surprise diplomatic signal from President Trump has provided a much-needed de-escalation catalyst," said energy market analysts. "The pause on strikes against key Iranian infrastructure removes immediate downside risks to supply, allowing traders to unwind elevated geopolitical premiums."
President Trump has consistently prioritized resolving the conflict while protecting U.S. interests, including preventing Iran from advancing its nuclear capabilities.
He has previously noted that prolonged high oil prices, while benefiting American producers as the world's largest oil producer, are secondary to national security objectives.
The White House indicated that further updates on the talks would be provided as developments warrant. Markets remain sensitive to any new statements from either side, with volatility likely to persist until concrete progress is confirmed.