Global oil prices experienced a significant decline on Monday, with Brent crude dropping 5.5% to $97.90 a barrel, as optimism grows regarding a potential peace agreement between the United States and Iran. US Secretary of State Marco Rubio indicated that negotiators have a substantial framework in place, raising hopes that a resolution to the ongoing conflict could be finalized shortly. President Donald Trump noted that while discussions are progressing, the administration remains committed to securing a comprehensive agreement that benefits all parties involved.

Despite the positive sentiment, officials in Tehran have urged caution, stating that while significant progress has been made on many points of contention, a final signing is not yet imminent. The negotiations are expected to address the reopening of the Strait of Hormuz, a critical maritime chokepoint that has been effectively closed since late February. The closure of this route, which typically handles roughly one-fifth of the world’s oil and liquefied natural gas, has been a primary driver of global energy price volatility over the past several months.

Market analysts warn that even if a diplomatic breakthrough is achieved, the path to normalcy will be gradual. Experts suggest that global energy markets will likely remain tight through 2027, as the shipping industry faces logistical hurdles, including the need to clear potential sea mines and repair damaged infrastructure. While the prospect of a deal has provided immediate relief to energy prices and boosted stock indices like Japan’s Nikkei 225, the maritime sector remains hesitant to resume full-scale operations in the Persian Gulf until long-term stability is guaranteed.