Oil prices fell in afternoon trading on Monday after Iranian media reported that US officials had agreed to suspend sanctions on Iranian crude exports while talks to end the conflict continue.
The report by Iranian news agency Tasnim News Agency cited an unnamed source and remained unconfirmed. However, traders reacted quickly to the development after US President Donald Trump warned Tehran on Sunday that time was running out to reach a deal.
Analysts said the report eased concerns over prolonged disruption in oil supplies. The conflict has effectively blocked the Strait of Hormuz, a key shipping route that handles around 20 per cent of global oil exports during peacetime, pushing oil prices sharply higher in recent days.
Brent crude fell 1.0 per cent to $108.12 a barrel, while West Texas Intermediate dropped 1.2 per cent to $99.86 a barrel.
Global stock markets also recovered after earlier losses. European indexes turned positive, and Wall Street opened higher as fears of rising inflation and slowing economic growth eased.
Investors are also closely watching a meeting of the Group of Seven finance ministers and central bank chiefs in Paris, where rising government bond yields are expected to be a major topic. Analysts warned that higher borrowing costs could slow investment, including heavy spending on artificial intelligence infrastructure.
Attention is also focused on quarterly earnings from Nvidia due on Wednesday, as investors assess whether massive investments in AI data centres will generate strong returns.
In Asia, Seoul stocks rose 0.3 per cent, supported by continued optimism around AI spending. In Tokyo, shares of Kioxia jumped 16 per cent after the company projected operating profit of 1.3 trillion yen for April to June, driven by strong demand linked to AI data centres.