Oil plummeted 6% overnight, sliding below $79 a barrel after President Trump confirmed US-Iran negotiations would kick off Monday afternoon. The move came as Trump announced he'd canceled a planned military operation against Iran, following direct pressure from Saudi Arabia, the UAE, and Qatar to hold fire.
The selloff reversed months of tension. Last month oil had jumped over 20% as traders braced for escalating Middle East conflict. Now, with diplomacy on the table instead of airstrikes, the market was repricing the risk almost instantly. Traders who'd been hedged for war suddenly unwound those positions.
What's Actually on the Negotiating Table
Trump tied the talks to two specific outcomes: first, a deal on controlling the Strait of Hormuz, which handles roughly a third of global seaborne oil shipments. Iran's Foreign Minister Abbas Araghchi said those negotiations with Oman are already in final stages, with both sides apparently close to agreement on shared management of the waterway.
The second piece is Iran's nuclear program. Trump framed it bluntly: "There's a deal on Hormuz and then there will be a deal on the denuclearization of Iran." When pressed on deadlines, he stayed vague. "We'll just see how it is. We're ready to go any time we want," he said. "I'm not looking to kill people. We don't want that."
Markets Split on What Comes Next
Stock futures climbed on the news, with S&P 500 contracts up more than half a percent. Bond yields and the US dollar both fell as investors rotated away from safe-haven trades. Bitcoin, though, bucked the trend and dropped below $63,000 despite the broader risk-off reversal, suggesting crypto traders were reading the situation differently than equities desks.
This article is for informational purposes only and does not constitute financial or investment advice. Always consult with a qualified professional before making trading decisions.
