Oil price falls after Trump signals progress in Iran talks, easing Hormuz fears

OIL prices fell sharply on Monday, with Brent crude dropping more than 10.24 percent to $102 per barrel within minutes of U.S. President Donald Trump’s remarks suggesting progress in discussions with Iran over de-escalating tensions in the Middle East.

Trump, posting on Truth Social, said the United States and Iran had engaged in what he described as ‘very good and productive conversations’ over the past two days, aimed at achieving a ‘complete and total resolution’ of hostilities in the region. The comments immediately triggered a selloff in crude markets, with Brent sliding to around $102 in early trade while West Texas Intermediate (WTI) slipped to about $89.91, indicating an 8.47 percent decline over Sunday.

However, Iranian state-linked media pushed back on the claim, reporting that there had been no direct or indirect communication with Trump, casting doubt on the extent of any diplomatic breakthrough.

At the same time, Iran’s Islamic Revolutionary Guard Corps (IRGC) appeared to soften its tone as the deadline set by Trump for reopening the Strait of Hormuz approaches. The group signaled a possible easing of earlier threats, particularly those targeting civilian infrastructure, even as tensions across global energy markets remain elevated.

READ ALSO: Oil prices jump above $100 as Iran installs new supreme leader without Trump

The Strait of Hormuz, effectively shut since late February after strikes attributed to the United States and Israel, remains the central pressure point in the crisis. The waterway handles roughly one-fifth of global oil and liquefied natural gas flows, and its disruption has already pushed crude prices higher while raising concerns about prolonged supply instability.

In statements carried by regional media outlets, the IRGC denied accusations that it targeted desalination facilities in Gulf countries. Instead, it alleged that U.S. forces struck water infrastructure on Iran’s Qeshm Island. The group also warned that any attack on Iranian power plants would constitute an ‘inhumane act,’ citing the potential knock-on effects for hospitals, water systems, and essential civilian services.

This rhetoric marks a noticeable shift from the more aggressive stance taken over the weekend, when Iranian officials warned of broader retaliation, including the mining of parts of the Gulf and strikes on regional energy infrastructure linked to U.S. interests.

Despite the slightly moderated tone, Tehran maintained that escalation remains a possibility. The IRGC reiterated that if the United States moves ahead with attacks on Iranian energy assets, it would respond by targeting power facilities associated with U.S. operations in the region, alongside wider industrial and energy infrastructure, Oilprice.com reported.