Global oil prices experienced a sharp decline on Monday, dropping roughly 6% to hit their lowest levels in two weeks. This downward trend was largely fueled by rising optimism regarding a potential peace agreement between the United States and Iran. As reports emerge of progress in negotiations aimed at reopening the vital Strait of Hormuz—a crucial artery for global energy transit—traders have begun pricing in the possibility of increased supply. Brent crude slipped below $98 a barrel, while US West Texas Intermediate fell toward $91, marking a significant market reaction to the diplomatic buzz.

Despite the newfound optimism, industry experts remain wary of overreacting, noting that the path to a finalized agreement is still fraught with obstacles. Both nations continue to clash over several unresolved issues, and leaders have cautioned against rushing into a premature deal. Analysts point out that even if an agreement is reached, restoring full operational capacity in the region will likely take months of repair work. As markets look for stability following a volatile period, the combination of cautious diplomacy and a slight uptick in US drilling activity suggests that while the immediate price pressure is easing, the global energy outlook remains delicate.