Oil prices fall as US and Iran weigh peace proposal

Oil prices retreated on Monday as investors processed news of a potential peace framework between the United States and Iran[country:\{ value:"IR" }]. This follows a period of extreme volatility where prices surged significantly during the previous week. Brent Crude Oil futures declined by $1.92, or 1.76%, to settle at $107.11 per barrel. Simultaneously, West Texas Oil futures dropped $2.03, representing a 1.82% decrease to $109.50 per barrel. These losses come after a massive spike in the previous session, where West Texas intermediate crude jumped 11% and Brent rose 8%, marking the largest absolute price increases since 2020.

Diplomatic efforts have intensified as both Washington and Tehran received a proposed framework to end hostilities. However, the situation remains tense as Tehran has initially rejected the immediate reopening of the Strait of Hormuz. This refusal comes in the wake of warnings from the American administration regarding potential consequences if a deal is not reached by Tuesday. The Strait of Hormuz is a critical artery for global energy, transporting crude and petroleum products from Iraq, Saudi Arabia, Qatar, Kuwait, and the United Arab Emirates. The passage has been largely obstructed following hostilities that began in late February.