Oil prices fall as Donald Trump signals U.S. strikes on Iran unlikely

Crude oil prices opened lower on Monday after U.S. President Donald Trump stated that fresh military strikes on Iran are "highly unlikely" so long as negotiations to end the conflict show progress.

The diplomatic signals offered relief to energy markets that had spent recent weeks pricing in potential supply disruptions across the Middle East. Brent crude futures shed as much as 84 cents to trade at $97.48 a barrel, reversing small gains recorded late last week. U.S. West Texas Intermediate crude fell 32 cents to $90.51 a barrel.

Trump signals diplomatic opening but keeps military threat

In a phone interview with CNN, Trump stated that renewed military intervention against Iran was unnecessary if Tehran agrees to a comprehensive settlement regarding its nuclear programme and maritime security.

"It depends on whether or not they sign a very strong agreement," Trump said. "The answer is, highly unlikely it's going to be necessary."

Trump reiterated five times during the interview that further strikes were unlikely if progress continued. However, he warned that Washington has mapped out 38 Iranian bridges that U.S. forces could destroy within an hour if talks break down. Iran has previously stated that it would respond to any new attacks by targeting U.S. and Israeli positions.

Market analysts noted that while the tone from Washington has softened, traders remain cautious. Tim Waterer, chief analyst at KCM Trade, said the market is still waiting to see whether Washington's stance represents a lasting policy shift or a temporary change in rhetoric following the U.S. midterm elections.

Supply gluts and shipping risks in the Strait of Hormuz

The drop in prices follows a sharp 17% decline in Brent crude last week, its largest weekly fall since the onset of the COVID-19 pandemic. A report published by JPMorgan highlighted that recovering Middle Eastern crude flows, combined with growing production elsewhere and sluggish demand, pushed global supply above consumption. JPMorgan estimated the global crude surplus at 1.1 million barrels per day in September, expanding to 1.4 million barrels per day in October.

Geopolitical risks along key supply routes persist despite the easing price benchmark. Disruptions through the Strait of Hormuz have continued for more than eight months, severely constraining shipments to major refining centres across Asia.

Data from energy intelligence firm Kpler showed global refinery inputs dropped by 4.8 million barrels per day in the second quarter of 2026. China suffered the heaviest toll, seeing refinery inputs shrink by 2.1 million barrels per day in the second quarter and a further 800,000 barrels per day in the third quarter. India, South Korea and Japan experienced a combined drop exceeding 1 million barrels per day in the second quarter before recovering by 800,000 barrels per day in the third quarter as refineries adapted routes.

To mitigate shipping bottlenecks, Iraq reached an agreement with the U.S. to route crude exports through a secured lane near Oman, Iraqi Foreign Minister Fuad Hussein told Al Jazeera. Hussein noted that war-related disruptions have cost Iraq $60 billion in financial losses. Meanwhile, Houthi forces claimed responsibility for a drone and missile attack on Saudi Aramco's headquarters in Riyadh on Sunday, which caused structural damage but no reported casualties.