International crude oil prices fell to a two-week low on Monday on optimism surrounding a potential peace agreement between the United States and Iran. Although significant geopolitical disagreements persist, the prospects of a diplomatic breakthrough triggered a sharp decline in global energy benchmarks.

According to Reuters, Brent crude declined by USD 4.71% or 4.55% to settle at USD 98.83 per barrel. Simultaneously, US West Texas Intermediate crude dropped by USD 4.57 or 4.73% to USD 92.3 per barrel, marking the lowest positions for both indices since 7 May. Concurrently, the Euro appreciated by 0.37 % to USD 1.1646, while the Japanese Yen strengthened to 158.85 per USD. Financial markets reacted positively to the developments, with Nasdaq futures rising by 0.89 % and S&P futures advancing by 0.6 %.

The price contraction followed statements from US President Donald Trump, who indicated that Washington and Tehran have largely finalised a memorandum of understanding to potentially reopen the Strait of Hormuz. The strategic waterway previously facilitated the transit of nearly one-fifth of global oil and liquefied natural gas shipments before the outbreak of hostilities. However, Trump later advised his diplomatic envoys not to hasten the negotiations, as critical disputes over the maritime blockade remain unresolved.

Market experts expressed cautious optimism regarding the short-term economic relief while noting that restoring full maritime infrastructure could require several months. MST Marquee analyst Saul Kavonic observed that visible progress offers immediate market stability despite lingering logistical risks. Meanwhile, ATFX Global Chief Market Analyst Nick Twidale stated that sustained market confidence hinges on an official declaration regarding the waterway. Strategists at the Commonwealth Bank of Australia echoed these concerns, noting that the timeline and specific operational conditions for reopening the trade route remain the primary questions for global financiers.