Oil prices tumbled Monday after President Donald Trump said the U.S. and Iran had productive talks about ending the war and that he ordered a five-day halt on strikes against key energy infrastructure in the country.
Brent crude fell more than 11% to $99.71 per barrel after topping $112 on Friday. West Texas Intermediate futures dropped more than 10% to $88.07 per barrel.
“I AM PLEASE TO REPORT THAT THE UNITED STATES OF AMERICA, AND THE COUNTRY OF IRAN, HAVE HAD, OVER THE LAST TWO DAYS, VERY GOOD AND PRODUCTIVE CONVERSATIONS REGARDING A COMPLETE AND TOTAL RESOLUTION OF OUR HOSTILITIES IN THE MIDDLE EAST,” Trump said Monday in a Truth Social post.
“I HAVE INSTRUCTED THE DEPARTMENT OF WAR TO POSTPONE ANY AND ALL MILITARY STRIKES AGAINST IRANIAN POWER PLANTS AND ENERGY INFRASTRUCTURE FOR A FIVE DAY PERIOD,” Trump wrote.
The post comes after Trump on Saturday said Iran has 48 hours to reopen the Strait of Hormuz or the U.S. will strike Iran’s power plants.
It’s still not clear when the key shipping route will reopen.
Goldman Sachs sharply raised its oil price forecasts on Monday, expecting Brent to average $110 in March and April, up from a previous forecast of $98, or a 62% jump from the 2025 annual average. The bank also upgraded its WTI estimates to $98 in March and $105 in April.
“Assuming that Hormuz flows remain at 5% [of normal flows] through April 10, prices are likely to trend higher over that period,” Goldman analysts said, adding that governments’ recognition of the risks surrounding concentrated supply and limited spare domestic capacity could further lead to greater stockpiling and long-dated prices.
Should Hormuz flows remain at 5% for 10 weeks, daily Brent prices will likely exceed their 2008 record level, Goldman said. Brent crude hit about $147 per barrel in July 2008 before collapsing to around $40 within months as the global financial crisis crushed demand.
The Strait of Hormuz normally handles roughly 20% of global oil supplies.
Iranian state media on Sunday insisted that Tehran would allow safe passage through the strait for all shipping except vessels linked to “Iran’s enemies.”
Fatih Birol, the executive director of the International Energy Agency, warned Monday that the situation in the Middle East is “very severe” and far worse than the two oil shocks in the 1970s as well as the impact of the Russia-Ukraine war on gas, put together.
IEA member nations on March 11 agreed to release a record 400 million barrels of oil from strategic stockpiles to address the supply disruption triggered by the Iran war.
The IEA chief said he had been consulting with governments in Asia and Europe on releasing more stockpiled oil “if necessary,” while stressing that the most important solution would be “opening the Hormuz Strait.”