Global oil prices fell sharply on Monday after US President Donald Trump signaled that Washington would pursue negotiations with Iran instead of launching immediate military action, easing fears of a wider conflict in the Middle East.

Brent crude futures dropped by $4.08, or 4.64%, to $83.50 per barrel. Meanwhile, US West Texas Intermediate (WTI) crude declined by $4.01, or 4.74%, to trade at $79.70 per barrel.

Oil prices had surged more than 20% over the past month due to rising tensions between the United States and Iran, attacks on oil tankers near Oman, and growing security concerns around the Strait of Hormuz, one of the world's most important oil shipping routes.

In a post on his social media platform, President Trump said Iran and several Middle Eastern countries had requested more time to finalize an agreement that could reopen the Strait of Hormuz and help resolve concerns over Iran's nuclear program.

Market analyst Tony Sycamore said investors are closely watching whether diplomatic talks make progress this week or if Iran continues to pressure shipping through the Strait of Hormuz, which could trigger fresh tensions and push oil prices higher again.

Meanwhile, two Saudi oil tankers successfully passed through the Bab al-Mandab Strait over the weekend, although vessel traffic through the Strait of Hormuz remained slower than usual. Britain's Maritime Trade Operations authority also reported three additional tanker attacks since Saturday.

Separately, OPEC+ approved an increase of about 188,000 barrels per day in oil production from September. However, analysts believe supply disruptions from the Gulf region, Russia, and Kazakhstan may limit the immediate impact on global oil markets.