Oil prices experienced a notable decline on Monday as market sentiment shifted following comments from US President Donald Trump. By downplaying the possibility of new military strikes against Iran, Trump’s rhetoric has eased some of the immediate geopolitical anxiety that typically drives up energy costs. Consequently, both Brent crude and West Texas Intermediate saw significant drops, continuing a downward trend that began last week when benchmarks hit two-month lows. Analysts suggest that the market is currently reacting more to the possibility of a diplomatic resolution than to tangible progress on the ground, leaving investors cautious as they wait to see if this change in tone represents a lasting shift in US policy.

Despite the cooling rhetoric regarding potential conflict, supply concerns remain a critical factor in the global market. While the prospect of a peace deal provides downward pressure, the ongoing volatility in the Middle East—highlighted by recent attacks on shipping vessels near the Strait of Hormuz and strikes on Saudi infrastructure—keeps a floor under prices. Furthermore, supply chain data from JPMorgan indicates that the world may be heading toward an oil glut as production levels in various regions outpace weak global demand. With analysts noting a growing surplus, the market remains caught between the threat of geopolitical instability and the sobering reality of an oversupplied physical market.