Meanwhile, mixed messages abound regarding peace negotiations: File Image/Pixabay

As has become the norm, oil trading on Monday seemed to be driven entirely on ill-advised sentiment, with prices dropping a massive 7 percent after U.S. president Donald Trump cancelled a major attack on Iran – and despite the Islamic republic rejecting a planned resumption of peace negotiations, which then caused the brash billionaire to state that it was on the verge of “decapitation.”

Brent fell $6.35, or 7 percent, to settle at $83.77 per barrel; West Texas Intermediate settled down $4.33, or 5.1 percent, at $80.34 per barrel.

While pundits yet again hoped that peace negotiations could be rekindled, mixed messages prevailed once more by mid-session, with Trump condemning Iranian leaders as "duplicitous" for appearing to back away from intentions to talk on Monday.

He wrote on Truth Social, “They ask for a meeting, some would say 'beg,' talks begin, with more scheduled in the immediate future, and they say, openly and proudly, that they’re not having any discussions, that nothing is being talked about, and they’re only dealing with 'Oman.'"

Trump followed this up by stating, “I want to give them every last chance before decapitation; very tough to do.”

In terms of fundamentals, the United Kingdom Maritime Trade Operations reported three more tanker attacks ⁠by Iran since Saturday, and traffic both in the Strait of Hormuz and Bab el-Mandeb slowed over the weekend.

Mohsen Rezaee, adviser to Iran’s supreme leader, said on Iranian state TV, that Tehran’s discussions with Oman to get more ships moving through the Strait were making progress, but Washington must “take the first step and change its behavior.”

This caused Carolyn Kissane, associate dean at New York University’s Center for Global Affairs, to remark, “As long as there are these openings to move barrels around, I think this on-off can continue.

“Iran doesn’t want to escalate but does want to keep up the tension, and there will be more attacks after this market retreat; we have been here before.”

Tony Sycamore, analyst at IG, said of upcoming crude trading, “The bigger focus is whether this week turns into a rinse and repeat of last week — with hopes of a deal collapsing as Iran digs in its heels and continues to leverage its control over the Strait.”