Oil prices fell on Monday after President Donald Trump said the United States and Iran had held productive talks to end the war and ordered a five-day halt to strikes against the country’s key energy infrastructure.
Brent crude oil fell more than 6% to $105.09 per barrel after topping $112 on Friday. West Texas Intermediate futures fell nearly 6% to $92.29 a barrel.
“I want to report that the United States and the State of Iran have had very helpful and productive discussions over the past two days regarding a complete and complete resolution of hostilities in the Middle East,” President Trump said in a post on Truth Social on Monday.
“I have directed the Department of the Army to postpone for five days any military strikes against Iranian power plants and energy infrastructure,” Trump said.
The post came after President Trump said on Saturday that Iran had 48 hours to reopen the Strait of Hormuz or the United States would attack Iranian power plants.
It is not yet clear when major transport routes will reopen.
Goldman Sachs significantly raised its oil price forecast on Monday, predicting that Brent crude prices will average $110 in March and April, up 62% from its previous forecast of $98, or the annual average in 2025. The bank also raised its WTI forecast to $98 in March and $105 in April.
“Assuming that inflows to Hormuz Island remain at 5% (of normal inflows) until April 10, prices are likely to trend upward during that period,” Goldman analysts said, adding that government recognition of risks around supply concentration and limited domestic spare capacity could lead to further stockpiling and longer-term prices.
Goldman said if Hormuz inflows remain at 5% for 10 weeks, daily Brent prices are likely to surpass record levels set in 2008. Brent crude oil reached about $147 per barrel in July 2008, but fell to about $40 within a few months as the global financial crisis squeezed demand.
The Strait of Hormuz typically handles about 20% of the world’s oil supplies.
Iranian state media claimed on Sunday that Tehran would allow safe passage through the strait for all ships except those associated with “enemies of Iran.”
International Energy Agency Director-General Fatih Birol warned on Monday that the situation in the Middle East was “very difficult” and far worse than the two oil shocks of the 1970s and the gas impact of the Russia-Ukraine war combined.
IEA member states agreed on March 11 to release a record 400 million barrels of oil from strategic stockpiles to deal with supply disruptions caused by the Iran war.
The IEA chief said he was consulting with Asian and European governments about releasing more oil reserves “if necessary” and stressed that the most important solution was “opening the Strait of Hormuz.”
