Oil Prices Fall Over 6% as Trump Delays Iran Strike, Resumes Peace Talks

Crude oil prices tumbled on Monday after the United States stepped back from fresh military action against Iran, raising hopes that diplomatic efforts could help ease tensions in the Middle East.

Brent crude futures fell more than 5% to around $83.3 a barrel, while US West Texas Intermediate (WTI) crude dropped over 6% to about $79.5 a barrel. On the MCX, crude oil futures settled 6.1% lower at ₹7,619 per barrel, marking one of the sharpest single-day declines in recent weeks.

Why Are Oil Prices Falling Today?

The sell-off followed comments from US President Donald Trump, who said a planned military strike on Iran had been postponed and that fresh negotiations would begin this week.

The announcement reduced fears of an immediate disruption to oil supplies from the Middle East. Traders unwound part of the geopolitical premium that had built up in crude prices over the past few weeks, leading to broad-based selling across the energy market.

The latest diplomatic move comes after weeks of rising tensions between Washington and Tehran.

According to Kotak Neo Commodity Research, the talks are aimed at curbing Iran's nuclear programme and reopening shipping through the Strait of Hormuz. While the negotiations have improved market sentiment, risks have not disappeared completely.

Iran continues to hold strategic influence over the Strait of Hormuz, and recent tanker attacks near the Red Sea and the Gulf underline that supply risks remain. Any setback in the talks could quickly bring the geopolitical risk premium back into oil prices.

OPEC+ Supply Increase Also Weighs on Crude

Apart from geopolitical developments, traders also reacted to OPEC+'s decision to raise production by 188,000 barrels per day in September, completing the unwinding of its voluntary output cuts.

Even so, supply from countries such as Iran, Russia and Kazakhstan has remained below expectations because of ongoing disruptions, limiting the additional crude reaching the market.

MCX Crude Oil Technical Outlook:

Kotak Neo Commodity Research expects crude oil to remain sensitive to headlines around the US-Iran negotiations. While prices have corrected sharply, the market could remain volatile as traders assess developments in the Middle East and changes in global supply. A breakdown in negotiations or fresh disruption to Gulf shipping could trigger another sharp move in crude prices.

What's Next for Oil Prices?

The market will closely track the progress of the US-Iran talks over the coming days. Traders will also watch whether shipping through the Strait of Hormuz remains uninterrupted and how quickly the additional OPEC+ supply reaches the market. These factors are likely to determine the near-term direction of crude oil prices.

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