Oil prices saw a significant drop on Monday, with Brent crude, the international benchmark, falling six per cent to $90.98 per barrel. This decline followed an announcement by the US that President Trump was pausing strikes on Iran.
The pause in military action is intended to allow an Omani delegation to lead talks aimed at securing transit through the Strait of Hormuz. Last week, oil prices had reached two-month highs of over $100 per barrel after Iran-backed Houthis claimed responsibility for tanker strikes in the Red Sea.
The fall in oil prices provided a boost to global markets on Monday. The FTSE 100 closed 0.6 per cent higher, while US markets also saw gains, with the Nasdaq rising 1.1 per cent and the Dow Jones Industrial Average gaining 1.2 per cent in early trading. However, the S&P fell into the red shortly after Monday's market open due to sliding chip stocks.
President Trump has warned that the US will resume a "very powerful" military operation against Iran if the ongoing talks fail.