West Texas Intermediate (WTI) crude oil prices fell below $70.00, trading around $69.60 during early Asian hours on Monday, following reports that the United States and Iran have agreed to pause retaliatory strikes and plan to hold talks in Qatar on Tuesday [1]. According to an Axios report cited in Source 1, Washington and Tehran agreed to end more than three days of strikes in and around the Strait of Hormuz and will engage in further technical discussions. This agreement follows a period of heightened tensions, including US strikes on Iranian military targets in retaliation for attacks on shipping vessels, and claims by Iran's Islamic Revolutionary Guard Corps (IRGC) that it destroyed eight US military sites in Kuwait and Bahrain [1].
Traders are closely monitoring these developments, as progress in US-Iran negotiations could restore oil flows through the Strait of Hormuz, which accounts for one-fifth of the world's oil supply. Such progress could exert further downward pressure on WTI prices, while renewed escalation could trigger supply disruption fears and boost prices [1]. The American Petroleum Institute (API) is also set to release its weekly crude oil report on Tuesday, with inventory data expected to influence WTI prices depending on whether it signals stronger demand or excess supply [1].
In currency markets, the Australian Dollar (AUD) held steady below 0.6900, trading around 0.6895, as traders assessed the uncertainty surrounding the US-Iran talks [2]. Reuters reported that both countries plan to meet in Qatar on Tuesday, following several days of strikes and counterstrikes after an Iranian projectile hit a cargo vessel in the Strait of Hormuz on Thursday [2]. Both Washington and Tehran have accused each other of breaking an interim ceasefire agreed to on June 17 [2]. The ongoing uncertainty has supported the US Dollar as a safe-haven currency and created headwinds for the AUD/USD pair [2].
On the domestic front, Australia's Unemployment Rate dropped to 4.4% in May from 4.5% in April, in line with market expectations, which may help limit losses for the Australian Dollar [2]. Markets have priced in nearly a 19% chance of a Reserve Bank of Australia (RBA) rate hike for August 10–11, according to the ASX RBA Rate Indicator [2].
CONCLUSION
The agreement between the US and Iran to pause hostilities and resume talks in Qatar has led to a sharp decline in WTI crude prices and increased uncertainty in currency markets. While progress in negotiations could further ease oil prices, any renewed escalation may quickly reverse this trend. The market remains highly sensitive to developments in the Middle East, with traders closely watching both geopolitical headlines and upcoming economic data releases.