Oil prices fall sharply on expectations the Strait of Hormuz may reopen, easing Middle East supply disruptions amid US-Iran talks.
West Texas Intermediate crude plunged nearly 5% in early trading Monday, nearing the $90 mark, as renewed optimism over a potential US-Iran peace deal fueled hopes for the reopening of the Strait of Hormuz. The critical chokepoint, handling about 20% of global oil supplies, has been a key concern for markets amid regional tensions.
The sell-off follows reports of progress in negotiations, though US officials cautioned that a final agreement remains uncertain. WTI had previously traded above $90 last week, supported by supply risks and geopolitical uncertainty. Analysts note that even partial easing of restrictions could significantly boost oil flows.
Markets are closely monitoring developments, with traders awaiting further details on the deal’s timeline and scope. President Donald Trump’s remarks on Sunday suggested lingering differences, while Secretary of State Marco Rubio indicated regional backing for an agreement.