Trump's Iran Opening Sinks Oil Prices Ahead of US-China Summit

Oil prices plummeted on Monday morning after President Trump announced his openness to renewed talks with Iran, erasing the risk premium that had pushed oil above $100 a barrel two weeks ago. The price of Brent crude fell by 3.1% to $100.65, while West Texas Intermediate (WTI) dropped by 3.9% to $96.35.

The move is seen as a response to the thaw in tensions between the US and Iran, which has led to a decrease in the risk premium that had driven up oil prices. This is good news for American drivers, who will see lower gasoline prices ahead of November's midterm elections, as well as Gulf producers with spare capacity who can maintain market share without discounting further.

The Trump administration is also seen as trying to manage inflation by cooling the Gulf and extending the tariff truce with China. The latter move removes a second source of imported price pressure and gives Beijing leverage regardless of the outcome of the summit between Trump and Xi Jinping on Thursday.