Oil prices dropped sharply on Monday, falling more than 6% to trade near $79 a barrel, after President Donald Trump confirmed that negotiations between the United States and Iran would commence later that day. The decline reversed a steep climb from the previous month, during which oil prices had surged over 20% as traders braced for a broader Middle East conflict.

Trump revealed that he had called off a planned military operation against Iran following appeals from Saudi Arabia, the United Arab Emirates, and Qatar to refrain from action. The three Gulf states, all significant oil producers with direct exposure to any confrontation involving Iran, had lobbied Washington to pursue a diplomatic off-ramp instead.

@POTUS on Iran: "Now what we're doing is we're talking to them in the form of a negotiation. It begins tomorrow afternoon — and we'll see." pic.twitter.com/B7bmK3brYC

— Rapid Response 47 (@RapidResponse47) August 2, 2026

Strait of Hormuz and Nuclear Program on the Agenda

Iran's Foreign Minister Abbas Araghchi stated that discussions between Iran and Oman regarding control of the Strait of Hormuz — a critical transit route through which roughly 20% of global daily oil consumption passes — have reached their final stages. Iran's Foreign Ministry spokesperson Esmaeil Baghaei indicated that the objective is to establish a joint framework for managing the strait, with both sides reportedly nearing an agreement.

Trump connected the Hormuz discussions to a broader diplomatic initiative. "There's a deal on Hormuz and then there will be a deal on the denuclearization of Iran," he said, confirming that US-Iran negotiations would begin Monday afternoon. He added that the results would inform subsequent talks on reopening the strait and placing limits on Iran's nuclear program. The reference to denuclearization comes after years of escalating tensions over Iran's enrichment activities, which intensified following the US withdrawal from the 2015 Joint Comprehensive Plan of Action during Trump's first term.

When pressed for a deadline, Trump declined to specify one. "We'll just see how it is. We're ready to go any time we want," he stated. "I'm not looking to kill people. We don't want that."

BREAKING: US oil prices crash below $79/barrel after President Trump cancels US strikes on Iran and says a deal is near. pic.twitter.com/NIpHBMMkBw

— The Kobeissi Letter (@KobeissiLetter) August 2, 2026

Stock Futures Climb While Bitcoin Declines

US stock futures advanced following the announcement, with S&P 500 futures gaining more than half a percent as markets responded to the prospect of reduced tensions in the Middle East.

Bitcoin, however, moved in the opposite direction. The cryptocurrency fell more than 1%, dipping below $63,000 — even as oil prices, the US dollar, and bond yields all declined simultaneously. The previous week, reports that the United States and Israel were weighing a land blockade against Iran had already driven Bitcoin below $64,000.

The US dollar index fell to 99.50 on Monday, coinciding with coordinated intervention by the United States and Japan to purchase the yen, which had weakened to a 40-year low. The 10-year Treasury yield also retreated, slipping below 4.7% after reaching an 18-month high. While lower yields and a softer dollar typically provide tailwinds for Bitcoin, that dynamic did not materialize on Monday, a divergence that has been observed during previous episodes of acute geopolitical uncertainty when cryptocurrency markets have sometimes decoupled from their usual macro correlations.

At the time of writing, Bitcoin traded at $62,760, with a 24-hour range between $62,717 and $63,714. Trading volume for the cryptocurrency increased 7% over the preceding day, indicating sustained market activity despite downward price pressure.

For the moment, oil markets and equity futures are reflecting optimism surrounding the peace talks, while Bitcoin traders appear to be awaiting greater clarity before the cryptocurrency establishes its next directional move.