By Monday afternoon, the price of Brent stood at $90.60 a barrel, down more than 6% for the day.
Susannah Streeter, chief investment strategist at Wealth Club, said markets were remaining “cautious given the twists and turns during this conflict”.
Despite the sharp fall in crude, “there is still significant uncertainty baked into these prices and a reticence about whether negotiations will lead to a lasting breakthrough,” she added.
The wholesale price of gas has also been rising recently, and analysis from research group Wood McKenzie published last week said European gas storage was at a historic low, with supply security for this winter “at risk”.
If the Strait of Hormuz remains closed for a further two months, it said storage will end up lower than 70% by 1 November, compared with a five-year average for that date of 90%.
“Low European inventories, strong Asian demand and limited new LNG supply growth almost guarantee elevated prices through this winter and into 2027,” said Massimo Di Odoardo, vice president of gas and LNG research at Wood Mackenzie.
The conflict between the US and Iran has also pushed up the cost of fuel such as petrol and diesel in many countries.