Oil plunges over 7% as Iran peace mandate and Trump remarks trigger massive sell-off

Global crude oil futures tumbled more than 7% on Monday as high-level diplomatic signals from Tehran and Washington raised expectations of a negotiated end to the US–Israeli conflict with Iran.

Crude benchmarks suffered their sharpest single-day retreat in months on Monday as peace overtures dismantled war-risk premia. Newly active January Brent plunged $8.66, or 7.63%, to settle at $104.77 a barrel after touching $103.28. WTI tumbled $7.66, or 7.36%, to close at $96.46, compressing the transatlantic spread inward to $8.31 ahead of Tuesday's US midterm elections.

A flurry of diplomatic headlines sparked aggressive liquidation. Iranian President Masoud Pezeshkian confirmed Supreme Leader Ayatollah Mojtaba Khamenei granted the government authority to pursue peace talks through dialogue. Concurrently, US President Donald Trump stated an agreement to end the war "could happen," as Qatari mediators arrived in Tehran for evening talks with Iranian Foreign Minister Abbas Araqchi.

Severe structural deficits nonetheless cautioned against excessive bearishness. ADNOC Chief Executive Sultan Al Jaber warned the world has drained nearly 1 billion barrels from inventories since the conflict began, while Goldman Sachs reiterated Brent could spike to $140 in 2027 if Gulf output remains impaired. Analysts at Raymond James also urged caution, citing multiple diplomatic false dawns.