Biggest one-day drop since the war began
Oil prices suffered their steepest single-session fall since the Iran conflict started on February 28. Brent crude tumbled 14% to $98.80 a barrel on Monday, slipping below the $100 mark for the first time in two weeks. WTI fell 12% to $86.99.
The trigger: President Trump announced he would postpone threatened strikes on Iranian power plants and energy infrastructure for five days, citing "very productive conversations" with Tehran about ending the 24-day-old war.
Five days of quiet, or five days of confusion
Trump posted on Truth Social that the US will "hold off" on attacking Iran's energy grid while talks continue. The announcement reversed his 48-hour ultimatum from Saturday that had pushed Brent above $113.
But Iran's Foreign Ministry flatly denied any dialogue. Spokesman Esmail Baghaei said there is "no dialogue between Tehran and Washington" and accused Trump of trying to "reduce energy prices and gain time." NBC News and Bloomberg confirmed that indirect communications through Oman are ongoing, though both sides disagree on what to call them.
The mixed signals left traders scrambling. Brent swung in a $17 range during Monday's session before settling near $99.
Market reads it as de-escalation
Wall Street treated the pause as the first genuine opening for a ceasefire. Bank of America told clients Monday morning that "the probability of a negotiated Hormuz reopening within 30 days has risen from 15% to roughly 40%." Energy stocks on the S&P 500 fell 6%, giving back part of a 24% year-to-date rally.
Still, some analysts warned against reading too much into one presidential Truth Social post. "We've seen this movie before," said Helima Croft, head of global commodity strategy at RBC Capital Markets, pointing to Trump's shifting tone throughout the conflict. She noted that actual shipping traffic through the Strait of Hormuz has not changed at all.
Supply picture stays grim
The Strait of Hormuz remains effectively shut. About 20 million barrels a day of crude and LNG normally pass through the waterway, and traffic is still running at a fraction of pre-war levels. Iraq declared force majeure on foreign-operated oilfields last week, and insurance companies continue to refuse cover for Gulf-bound tankers.
Goldman Sachs on Monday raised its full-year Brent forecast to $85 from $77, calling the Hormuz disruption "the largest supply shock in the history of the global crude market." The bank estimates cumulative supply losses of more than 800 million barrels and warned Brent could spike to $135 if disruptions last beyond 10 weeks.
The IEA, which coordinated a record 400-million-barrel release from strategic stockpiles on March 11, cut its global demand growth forecast by more than 1 million barrels a day for March and April. Flight cancellations across the Middle East and broken LPG supply chains are dragging consumption down almost as fast as the blockade is cutting supply.
What to watch
Trump's five-day window expires Friday. If talks produce a framework for reopening Hormuz, traders expect Brent could slide back toward the $80s. If the deadline passes without progress and strikes resume, the Goldman $135 scenario comes into play.
For now, the market is caught between two forces: hope that diplomacy will reopen the strait, and the hard reality that not a single extra barrel has moved through it today.