Oil Prices Plummet as Diplomatic Hopes Rise in Middle East

Oil prices plummeted to a 12-day low on Monday, while US stock index futures held steady ahead of Tuesday's open. The decline in oil prices is largely attributed to market expectations that tensions between Iran and the United States may be easing.

A proposed meeting between Iranian President Masoud Pezeshkian and US President Donald Trump during the UN General Assembly has raised hopes for a diplomatic breakthrough. According to Japan's Kyodo News, citing senior Iranian government officials, Iran has proposed reopening the Strait of Hormuz within seven days if the US eases military pressure.

PVM Oil Associates analyst Tamas Varga noted that investors are pinning their hopes on a breakthrough in peace talks this week. Meanwhile, Saxo Bank cautioned that the price movements reflect the substantial geopolitical risk premium still embedded in energy prices.