Oil prices dropped during Monday's Asian trading session after US President Donald Trump announced the cancellation of a planned military strike on Iran, prompting investors to reduce geopolitical risk premiums.

As of 2:21 AM Eastern Time, September West Texas Intermediate crude futures fell nearly 6.17% to $79.45 per barrel, while October Brent crude futures declined 5.31% to $83.26 per barrel. Trump stated earlier on Sunday that he decided to call off the planned strike against Iran following requests from Iran and other Middle Eastern nations.

In a post on Truth Social, Trump said: “Iran and other Middle Eastern countries have just asked us to postpone all attacks, and both sides have reached a framework agreement.” He indicated that the proposed deal includes key terms: the immediate, complete, and unconditional opening of the Strait of Hormuz, and the elimination of Iran's nuclear threat.

According to reports, the prospects for a diplomatic resolution to the conflict have been dimming since the outbreak on February 28, and Trump has been weighing whether to launch another attack on Iran. Iran responded cautiously to Trump's remarks.

Iran's official media posted on X platform a statement by Acting Defense Minister Seyyed Majid ibn Reza: “Although the enemy's recent statements are part of psychological and cognitive warfare, we treat all threats as real risks and take them seriously.” Fars International News Agency, affiliated with Iran's Islamic Revolutionary Guard Corps, dismissed Trump's proposal on social media on Sunday, stating that the US demands amount to nothing more than a “wish list of unilateral requests.”