Khaberni - Oil prices fell by about 10% to their lowest level in a week on Monday, after US President Donald Trump announced the postponement of any military strikes on Iranian power stations for five days following productive talks, just hours before the deadline he had threatened further escalation in the ongoing dispute for four weeks.
The futures of Brent crude dropped by $11.64, or 10.4%, to $100.55 per barrel at 10:19 AM Eastern Time (14:19 GMT), while the futures of West Texas Intermediate US crude fell by $9.66, or 9.8%, to $88.57.
On Monday, Trump said that the United States had conducted talks with Iran, and that both sides had reached "major agreement points." Earlier on Monday, the President announced that he had ordered a postponement of strikes on Iranian power stations for five days.
The Iranian Revolutionary Guard threatened to strike Israeli power generation stations and those supplying US bases in the Gulf region if the United States carried out Trump's threat to destroy the Iranian power network.
The war has significantly damaged major energy facilities in the Gulf and has effectively halted navigation through the Strait of Hormuz, through which about 20% of the global oil and liquefied natural gas flows pass.
Analysts estimate a loss between seven to ten million barrels of oil per day from Middle Eastern production.
On Monday, Fatih Birol, the executive director of the International Energy Agency, said that the crisis in the Middle East is worse than both oil shocks of the 1970s combined.
The supply shortage led to a temporary suspension of US sanctions imposed on Russian and Iranian oil at sea.
Dealers told Reuters that Indian refineries plan to resume buying Iranian oil, and other refineries in Asia are considering a similar step.
A senior executive at China's Sinopec, a state-owned oil refining company, said on Monday that the company does not intend to buy Iranian oil; however, it is seeking permission to use the state reserves, days after the United States lifted sanctions on buyers of some Iranian crude oil.
