Oil prices fall as Trump pauses Iran strikes and lifts markets

Global stock markets opened higher on Monday after US President Donald Trump announced the suspension of planned military strikes against Iran, easing geopolitical tensions that had unsettled energy markets throughout July. The decision triggered a sharp decline in oil prices while boosting equities across major regions, although energy companies came under pressure and Iranian officials challenged Washington’s account of the developments.

Brent crude dropped about 5% to around $83.30 per barrel after Trump said on Truth Social that Iran and its regional partners had requested time to negotiate an agreement covering the immediate reopening of the Strait of Hormuz and measures related to Tehran’s nuclear program. US benchmark crude recorded a similar decline.

The relief rally extended across European markets. The pan-European STOXX 600 index gained 0.4% in early trading, led by a 2.1% rise in travel and leisure stocks. Energy shares fell about 2% as lower crude prices weighed on the sector. US futures also pointed to a stronger opening, with S&P 500 futures advancing roughly 0.5% and Nasdaq 100 futures rising between 0.6% and 0.8%.

Indian markets also benefited from the drop in oil prices. The Sensex climbed as much as 800 points during the session, supported by a stronger rupee and renewed buying from foreign institutional investors. In Europe, Germany’s 10-year government bond yield fell five basis points to 3.158%, reflecting reduced inflation concerns as energy costs eased.

Asian trading produced mixed results despite the decline in crude prices. Japan’s Nikkei 225 lost 1.9% as the yen strengthened following confirmed intervention by the United States and Japan to support the currency. South Korea’s Kospi fell more than 5% as investors locked in profits on Samsung Electronics and SK Hynix after the previous week’s rally. Hong Kong’s Hang Seng outperformed with a gain of 0.6%.

Energy producers across Asia also weakened. Japan’s Inpex fell about 3.5%, while Australia’s Woodside Energy declined around 1.8% in response to the sharp fall in crude prices.

Iran disputed Trump’s description of the diplomatic developments. Officials quoted by the Mehr News Agency rejected claims that Tehran had requested a pause in military action, calling the statements false and insisting that Iranian armed forces remained on maximum alert. The Iranian Foreign Ministry also said no direct negotiations with the United States were taking place, although talks with Oman were continuing.

Investors are now turning their attention to a busy week of market-moving events. Quarterly earnings from Berkshire Hathaway, Eli Lilly, Walt Disney and Palantir are scheduled alongside the US employment report due on Friday. The payroll figures could influence expectations for any Federal Reserve interest rate decision in September.