Global oil prices experienced a sharp reversal on Monday, falling back below $87 a barrel after a report of a proposed 10-day ceasefire between the United States and Iran sparked a decline in energy prices . The drop came despite a fresh barrage of military strikes in the Middle East over the weekend, as traders pared some of the geopolitical risk premium that had built into prices in recent sessions . Brent crude for September delivery fell 1.6% to $86.67 a barrel, after rising as much as 3.8% to an intraday high of $91.42 earlier in the day .
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The pullback in oil prices was triggered by a Reuters report, citing an Iranian source, that mediators have put forward a proposal for a 10-day cessation of hostilities aimed at reviving an interim peace deal reached last month . According to Axios, the Trump administration is currently studying the proposal, which was brought forth by mediators including Qatar, Egypt, and Pakistan . The plan would establish a “cooling-off period” during which the parties would negotiate long-term arrangements for the Strait of Hormuz, a critical chokepoint through which roughly 20% of global oil trade typically passes .
