04.08.202612:07:16UTC+00Oil Drops as US-Iran Diplomacy Hopes Grow

Crude oil prices fell more than 3% on Monday to below $78 a barrel, erasing earlier gains as renewed hopes for diplomacy between the US and Iran eased fears of potential supply disruptions. Qatar announced that a draft proposal aimed at restarting negotiations is being circulated among the parties, though no deal has yet been finalized. The Gulf state, a key mediator between Washington and Tehran, said current efforts are focused on securing a short-term arrangement to prevent further escalation.

Oil is now down roughly 8% for the week after President Donald Trump postponed planned military action against Iran to allow more time for diplomatic efforts. Trump warned Tehran that it has a final opportunity to reach an agreement on the status of the Strait of Hormuz or face the prospect of renewed US strikes. However, the outlook remains uncertain, as Iran continues to insist on controlling maritime traffic through the strategic waterway. A breakdown in negotiations could quickly reignite military tensions, jeopardize energy supplies, and send oil prices sharply higher again.