Following a dramatic weekend shift in Middle East tensions, Brent crude futures plunged more than 5% within minutes of Monday's opening, sinking below the $90 per barrel mark. Meanwhile, WTI crude futures fell over 6% at the open, briefly dropping under $84 per barrel. Domestically, China's main crude oil contract fell to 547.4 yuan per barrel, hitting an intraday loss of 7.66%.

Just last week, Brent crude had surged past the $100 threshold, only to retreat by more than $10 from its peak in a matter of days. The direct trigger for this sharp market reversal was a sudden halt in US military strikes against Iran. According to reports from Axios, cited by Xinhua News Agency, US President Donald Trump ordered the military to stand down from attacking Iran on the 24th, breaking a 13-day streak of continuous US airstrikes. In response, Iran also signaled a de-escalation, with a senior Iranian official stating that if the US ceased its military action, Iran would reciprocate by halting its own operations.

Furthermore, reports suggest that Pakistan is facilitating a restart of negotiations between the US and Iran, rapidly fueling market expectations that the regional conflict could ease. Looking ahead, short-term oil prices will likely remain highly dependent on the next phase of Middle Eastern developments. If diplomatic talks yield tangible progress, the geopolitical risk premium could further diminish, potentially driving prices to continue their correction. However, structural supply-side support remains in place, as shipping risks through the Strait of Hormuz and the Red Sea are not yet fully resolved. The Yemeni Houthi group continues to attack Saudi oil facilities at Red Sea ports. Additionally, the pace of price reversals driven by shifting geopolitical narratives is difficult to predict. Until the situation becomes clearer, high volatility is expected to be the norm, with a potential return to risk premium buildup once the geopolitical narrative is settled.