Global oil markets experienced a significant downturn in Monday's Asian trading session, with prices dropping sharply as investors scaled back geopolitical risk premiums. This widespread relief came after former U.S. President Donald Trump announced the cancellation of a planned military strike on Iran, signaling a potential de-escalation of tensions in the Middle East.
An oilfield crew, contracted by the Railroad Commission of Texas (RRC), works a service rig during a state-funded oil well plugging operation in Midland, Texas, US, on Thursday, Sept. 25, 2025.
Eli Hartman | Bloomberg | Getty Images
West Texas Intermediate (WTI) futures for September delivery plunged by nearly 6.17%, settling at $79.45 per barrel. Simultaneously, Brent crude futures for October delivery saw a 5.31% decline, trading at $83.26 a barrel, as of 2:21 a.m. ET.
Trump revealed on Sunday that he had aborted the intended military action against Iran following a direct appeal from Tehran and other regional players. In a post on Truth Social, he stated, "We have just been asked by Iran, and other Middle Eastern Countries, to hold off any attack in that the perimeters of a deal has been agreed to."
He further elaborated that the contours of the proposed agreement would involve the "Immediate, Complete, and Total OPENING OF THE HORMUZ STRAIT, and an end to Iran's nuclear threat." This development emerged amidst reports that Trump had been considering further military action against Iran, particularly as diplomatic solutions appeared to be faltering since the conflict's onset on February 28.
Tehran's response to Trump's declaration was notably cautious. Seyyed Majid Ibn Al-Reza, Iran's acting defense minister, indicated that while such statements were perceived as psychological warfare, "we consider every threat to be real and take it seriously," as reported by state media on X. Meanwhile, Iran’s Fars International news agency, linked to the Islamic Revolutionary Guard Corps, quickly dismissed Trump’s proposals via Telegram, branding them as a mere "wish list."
— Contributions from CNBC's Azhar Sukri and Terri Cullen.
