Oil prices fell sharply on Monday morning as news broke that President Trump had called off a planned military strike against Iran, removing what traders had priced in as a significant supply disruption risk.
Brent crude fell $3.42, or 4.2%, to $77.85 per barrel โ its sharpest single-day decline in three months. West Texas Intermediate dropped similarly to $74.20. Meanwhile, airline stocks rallied across the board, with Delta, United, and American Airlines all gaining 2-4% on the prospect of lower jet fuel costs.
Analysts estimated that geopolitical risk had added between $8-12 per barrel to crude prices over the past month. If the diplomatic track holds, that premium could unwind rapidly, potentially pushing Brent toward $70-72 โ a level that would put serious pressure on OPEC+ members who need higher prices to balance national budgets.
Saudi Arabia needs oil at $80 to fund Vision 2030. A prolonged period below $75 would force difficult choices about production cuts or fiscal austerity.