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LONDON: Global oil prices recorded their sharpest single-day decline in weeks on Monday, falling to a three-week low after US President Donald Trump stepped back from plans for a military strike against Iran, raising hopes that diplomatic efforts could ease tensions and prevent disruptions to energy supplies from the Gulf. International benchmark Brent crude dropped 7 percent, or $6.35, to settle at $83.77 per barrel, while US West Texas Intermediate (WTI) crude fell 5.1 percent, losing $4.33 to close at $80.34 per barrel. The decline marked Brent’s weakest closing level since mid-July. Market analysts said the drop was also influenced by the expiry of the higher-priced September Brent contract, with the less expensive October contract becoming the new front-month benchmark. Investor sentiment shifted sharply after Trump announced that he had postponed military action against Iran, saying he wanted to allow time for diplomacy aimed at reaching an agreement that could reduce regional tensions and potentially increase Iranian oil exports. The possibility of additional crude entering global markets eased concerns over supply shortages, prompting traders to sell oil futures and pushing prices lower. However, Tehran quickly dismissed suggestions that negotiations with Washington were underway. Iranian Foreign Ministry spokesman Esmail Baghaei said there were no talks taking place with the United States and no meetings had been scheduled. He added that Iran had no plans to host foreign delegations or send negotiators abroad in the coming days. Trump, meanwhile, maintained that discussions with Iran were in progress and warned Tehran of serious consequences if it failed to reach an agreement aimed at ending the ongoing confrontation. Analysts call market reaction excessive Energy analysts said oil markets appeared to react strongly to political rhetoric rather than confirmed developments. According to analysts at energy consultancy Ritterbusch and Associates, the steep decline in crude prices reflected what they described as an overreaction by investors to Trump’s comments suggesting that an agreement with Iran could be imminent. They noted that the US president has repeatedly made strong statements regarding Iran before later softening his position, creating significant volatility in energy markets. Analysts also observed that Trump’s public calls for lower fuel prices in the United States have frequently weighed on oil markets by reducing expectations of sustained price increases. During Monday’s trading session, US gasoline and diesel futures also declined by nearly 5 percent, reflecting broader weakness across the energy sector. Shipping routes remain under pressure Despite hopes for diplomacy, concerns over maritime security in the Middle East continued to influence market sentiment. Shipping data showed that six Saudi-flagged supertankers altered their routes in recent days, avoiding the Gulf of Aden and instead sailing around southern Africa after Yemen’s Iran-backed Houthi movement threatened to target Saudi vessels. At the same time, some oil tankers continued to transit the region. Two Saudi oil tankers successfully crossed the Bab el-Mandeb Strait over the weekend, while vessel movements through the Strait of Hormuz slowed following reports of attacks on commercial shipping. The Strait of Hormuz remains one of the world’s most strategically important energy chokepoints, carrying roughly one-fifth of global oil trade before hostilities between the United States, Israel and Iran escalated earlier this year. A Panama-flagged tanker transporting Russian naphtha also reportedly abandoned plans to pass through the Bab el-Mandeb, choosing the longer route around Africa due to security concerns. Russia boosts maritime security Russia announced on Monday that it was strengthening security measures for commercial shipping in the Azov-Black Sea region while working to expand alternative export routes, following increased attacks on vessels linked to the conflict in Ukraine. As one of the world’s largest crude producers and a leading member of the OPEC+ alliance, Russia remains a key player in global energy markets. Disruptions to exports from the Gulf, Russia and Kazakhstan have continued to limit global oil supplies throughout the year, preventing previously announced OPEC+ production increases from fully reaching international markets. In a separate development, OPEC+ approved a production quota increase of approximately 188,000 barrels per day beginning in September. Although the move is intended to gradually raise output, analysts believe geopolitical risks and transportation disruptions could continue to limit the actual flow of additional crude to global buyers.