Oil prices fell sharply after President Donald Trump announced late Saturday that he had halted a U.S. assault on Iran. The decision to order U.S. forces to hold off on new strikes led investors to pare geopolitical risk premiums from crude over the weekend.
These market moves, the first since the announcement, saw oil prices drop while U.S. equity futures rose and the dollar slipped. Along with the canceled strike, an OPEC+ output hike helped drain the war premium from oil.
Market optimism has been further boosted by President Trump's statement that fresh U.S.-Iran talks would begin Monday. This has increased hopes that the two sides could reach a deal to reopen the Strait of Hormuz.