Oil price falls 6.5% to $105.55 as Iran war breakthrough hopes rise

Brent crude, the global oil benchmark, fell more than 6.5% on Monday to $105.55 a barrel, its lowest level since October 16, as markets reacted to renewed hopes for a diplomatic resolution to the Iran war. The sharp drop provided relief to inflation-weary consumers and businesses, while airline stocks rallied on expectations of lower fuel costs. Government borrowing costs also eased, reflecting improved risk sentiment. The decline comes after weeks of elevated prices driven by supply disruption fears. Iran is a major oil producer, and any de-escalation could restore significant export volumes to global markets. Traders are now closely watching diplomatic signals, with any concrete progress likely to push prices below the $100 mark. For airlines, which hedge fuel costs, the slide offers a potential margin boost heading into the busy holiday travel season. Lower oil also reduces input costs across industries, potentially easing central bank pressure to maintain aggressive interest rate hikes. While volatility remains high, the market's swift reaction underscores how sensitive prices are to geopolitical headlines. A lasting peace deal could anchor crude in a lower range, but any setback may quickly reverse these gains.