Brent crude falls over 10% After US President Trump announces temporary halt in Iran strikes

Brent crude oil prices fell sharply on Monday after US President Donald Trump announced a temporary pause in planned military strikes against Iran following recent diplomatic talks.

Trump said in a post on Truth Social that the United States and Iran had held “very good and productive” discussions over the past two days. He said the talks were aimed at a “complete and total resolution” of hostilities in the Middle East.

He further said that strikes on Iranian power plants and energy infrastructure had been postponed for five days, subject to ongoing discussions between the two sides.

Add Zee Business as a Preferred Source

Sharp fall in crude oil prices

Following the announcement, crude oil prices declined sharply in global trade as concerns over immediate supply disruptions eased.

Brent crude futures fell more than 13 per cent during trade. Prices slipped around $17, or nearly 15 per cent, to a session low of $96 per barrel.

US West Texas Intermediate (WTI) crude also fell sharply. It declined by about $13, or nearly 13.5 per cent, to a session low of $85.28 per barrel.

Earlier volatility in energy markets

The fall in oil prices came after a period of strong volatility in global energy markets due to escalating tensions in the Middle East.

Earlier in the day, oil prices had moved higher amid fears of supply disruption. Markets were reacting to reports of possible retaliatory action and risks to key energy routes.

Escalation risks and regional tensions

Trump had earlier warned Iran of severe consequences if it failed to reopen the Strait of Hormuz, a key global energy transit route. He had also threatened action against Iranian power plants if demands were not met within a set timeline.

In response, Iran had issued strong warnings. Iranian officials said that any attack on its power plants or infrastructure would trigger retaliatory strikes on energy facilities across the region.

Iran had also warned that critical energy infrastructure and oil facilities in the region could be targeted if escalation continued. The warnings added to uncertainty in global oil markets.

The conflict between Iran and the United States and Israel has also raised concerns about disruptions in global energy supply chains. The situation has remained tense for several weeks.

Earlier developments in the conflict had already impacted energy flows. There were reports of disruption in shipping routes through the Strait of Hormuz, which is considered one of the most important oil transit channels in the world.

Market participants have been closely watching developments in the region due to fears that prolonged tensions could reduce oil supply from key producing areas.

Market swings and earlier price levels

Oil prices had earlier surged before the latest fall. Brent crude futures had risen by more than $1 during volatile trade, while US WTI had also seen gains before reversing direction.

At one point, Brent crude was trading around $113.34 per barrel, while WTI was near $99.02 per barrel during earlier sessions, reflecting sharp intraday swings.

The market has seen frequent fluctuations due to alternating signals of escalation and possible de-escalation in the conflict.

Analyst outlook and Goldman Sachs forecasts

Analysts have also highlighted that supply risks remain significant. Estimates suggested a possible loss of 7 million to 10 million barrels per day of oil production in the Middle East under severe disruption scenarios.

Global investment bank Goldman Sachs also revised its oil price outlook amid the ongoing uncertainty. The bank raised its 2026 average forecast for Brent crude to $85 per barrel from $77. It also increased its forecast for West Texas Intermediate to $79 per barrel from $72.

Goldman Sachs said it expects extended disruptions to crude shipments through the Strait of Hormuz and higher strategic stockpiling by countries, which could tighten global supply conditions.

The bank also projected that Brent crude could average around $110 per barrel in March and April due to higher risk premiums in the market.

It added that in a high-risk scenario, prices could rise further if supply disruptions continue for a longer period.

According to Goldman Sachs, Brent prices could potentially peak at $135 per barrel in an extreme scenario involving prolonged disruption and significant production losses.

The bank also outlined risks on both sides of the market. It said that a possible end to military action in the region could quickly reduce the risk premium built into prices.

It further noted that policy decisions, such as potential restrictions on oil exports, could widen the price gap between Brent and WTI crude.

Despite short-term volatility, Goldman Sachs expects Brent and WTI to stabilise in the long term. It projected average prices of $80 for Brent and $75 for WTI through 2027, assuming supply and demand factors balance out over time.

Latest trading update and market commentary

In the latest trading update, Brent crude futures were down again by a small margin of around 8 cents at $112.11 per barrel. US West Texas Intermediate was also slightly lower at $98.17 per barrel in late trade.

On the geopolitical front, Iran continued to issue warnings. It said it would target energy and water systems of neighbouring countries in the Gulf if the United States followed through with threats against its infrastructure.

The overall situation has kept global energy markets on edge, with traders closely tracking every development in the region.

Market experts said the recent fall in oil prices reflects easing fears of immediate escalation. However, they added that volatility is expected to continue.

Zee Business Managing Editor Anil Singhvi said the latest development is a relief for global markets as tensions have reduced in the short term. He said the pause in escalation has helped calm panic in financial markets.

However, he also said that clarity from Iran and other stakeholders will be important to confirm whether the de-escalation continues.

He noted that crude oil prices will remain a key factor for global markets. According to him, prices would need to move below the $90 per barrel level to confirm a stronger easing in risk sentiment.

He added that markets may see a short-term relief rally, but uncertainty is likely to remain until a clear and lasting agreement is reached between the United States and Iran.