Oil prices declined on Monday as markets reacted to signs of potential de-escalation in the Iran conflict, even as uncertainty looms over the Federal Reserve's interest rate outlook.

President Donald Trump indicated on Sunday that he was holding off on ordering additional strikes against Iran. He said the decision came after U.S. allies in the Middle East reached the outline of an agreement to end the war, which he said would "include the Immediate, Complete and Total OPENING OF THE HORMUZ STRAIT, and an end to Iran's nuclear threat."

Trump stated that negotiations would begin Monday afternoon. The prospect of a deal to restore oil shipments through the Strait of Hormuz — constrained by the threat of Iranian attacks and mines during the conflict — sent oil prices lower. The Strait of Hormuz is one of the world's most critical energy chokepoints, through which roughly a fifth of global oil consumption normally passes, making any disruption there a direct lever on worldwide supply.

West Texas Intermediate crude, a key U.S. benchmark, fell approximately 6.2% on Monday morning, trading near $79.45 a barrel, a drop of roughly $5. Brent crude declined more than 3.5% to around $79.30 a barrel.

However, a spokesman for Iran's foreign ministry told Reuters that no negotiations with the U.S. were underway or scheduled, stating that the only ongoing discussions were with Oman regarding management of the Strait of Hormuz. That contradiction between Washington's announced timeline and Tehran's public position left the durability of Monday's price decline in question.

Oil prices had surged above $110 a barrel earlier this year as the conflict disrupted Middle East oil shipments. Tanker traffic through the Strait plummeted due to the threat of missile and drone strikes by Iran as well as mines laid in key shipping lanes.

Before the conflict began, oil prices had ranged between $60 and $70 a barrel, and the subsequent rise pushed U.S. gasoline prices higher. The national average for a gallon of regular gasoline stood at $4.095 as of Monday — up 7% from a month ago and 30% from a year ago — placing pressure on household budgets. Elevated energy costs have also complicated the Federal Reserve's efforts to bring inflation back toward its 2 percent target, as higher fuel prices feed into transportation and production costs across the broader economy.

In a post on his Truth Social platform, Trump referenced an interview in which Chevron CEO Mike Wirth outlined "all of the reasons that his company is doing so well" with FOX Business' Maria Bartiromo. Trump asserted that his administration had facilitated that success and called on the company to reduce consumer prices.

"The only thing he conveniently forgot to mention is that, without the genius, foresight, strength, and stability, of the TRUMP Administration, the Oil Industry, and our Country itself, would be DEAD! As an example, they threw Mike and Chevron out of Venezuela, but now they're back, far bigger and stronger than ever before, expecting to make a fortune! That goes for other Oil Companies as well…and get your consumer (retail!) Oil Prices DOWN, NOW!" Trump wrote.

The White House has previously criticized gas stations for not lowering prices, accusing them of padding profit margins. Industry groups representing smaller gas stations and energy marketers have pushed back, arguing that retail prices are tied to oil prices and typically decline over several weeks after oil drops, due to the need to sell through higher-cost inventory.