08:40 AM EDT, 03/23/2026 (MT Newswires) -- Oil futures were sharply lower early Monday as the market welcomed a stand down on U.S. threats to attack Iran's power and oil infrastructure.

West Texas Intermediate (WTI) crude oil for May delivery was last seen down $6.59 to US$91.64, while May Brent oil was down $7.38 to US$104.81.

The drop came after U.S. President Trump backed down from a weekend threat to "obliterate" Iran's power plants if Iran did not fully open the Strait of Hormuz to tanker traffic by the end of Monday. However in a 6:00 a.m. eastern time social media post, Trump backed down from the threat, saying he will postpone any action for five days because of "productive" conversations with Iran.

"I AM PLEASE TO REPORT THAT THE UNITED STATES OF AMERICA, AND THE COUNTRY OF IRAN, HAVE HAD, OVER THE LAST TWO DAYS, VERY GOOD AND PRODUCTIVE CONVERSATIONS REGARDING A COMPLETE AND TOTAL RESOLUTION OF OUR HOSTILITIES IN THE MIDDLE EAST. BASED ON THE TENOR AND TONE OF THESE IN DEPTH, DETAILED, AND CONSTRUCTIVE CONVERSATIONS, WITCH WILL CONTINUE THROUGHOUT THE WEEK," Trump said in an all-capitalized social media post.

Oil prices immediately plunged following the president's statement, with WTI dropping 15% before recovering as Iran, which had been threatening further attacks on the energy infrastructure of neighboring countries in the Persian Gulf should the U.S. follow through on the threat, denied it held any talks with the United States.

"Dow futures have swung from being down 300 points to up over +1,110 points, and everything else from bonds to oil to gold to the dollar to the VIX has reversed course. The TACO trade has just staged an incredible revival because it's not even clear who the President or his team was talking to, or even if this is accurate outside of a walk-back," Rosenberg Research's David Rosenberg wrote.

The war, now in its fourth week, has closed the key strait, shutting off around 20% of daily oil demand from the Persian Gulf. WTI and Brent oil has climbed by nearly half since hostilities began.