Brent Crude Falls Below $98 Amid Optimism Over Potential US-Iran Agreement
Brent crude slipped sharply as US-Iran talks eased global supply concerns.
Global oil prices fell sharply on Monday after signs of progress in negotiations between the United States and Iran raised hopes of a possible reopening of the Strait of Hormuz, easing concerns over prolonged disruptions to global energy supplies. Benchmark Brent crude dropped as much as 5.4% to $97.97 a barrel, while West Texas Intermediate fell below $92, extending recent losses in the energy market.
The decline marked Brent crude’s fourth fall in five trading sessions and placed prices on track for their lowest closing level in more than a month. The sell-off followed comments from US President Donald Trump, who said discussions with Iran were progressing, though he cautioned that a final agreement had not yet been completed.
“I won't rush into a deal,” Trump said in social media posts, adding that the agreement “isn't even fully negotiated yet.” Despite the improving diplomatic signals, the US blockade around the Strait of Hormuz remains in effect, with Washington stating that restrictions will continue until a formal agreement is finalised.
Also Read: Brent Crude Falls Below $100 Amid US-Iran Deal Optimism and Market Volatility
The Strait of Hormuz, one of the world’s most strategically important energy chokepoints, normally handles nearly a fifth of global oil and liquefied natural gas shipments. Supply concerns had intensified earlier this year after escalating tensions involving the United States, Israel, and Iran triggered broader instability across the Persian Gulf region. However, recent signs of improving maritime activity have started calming market fears.
Bloomberg ship-tracking data showed that an Iraqi crude supertanker bound for China crossed the US blockade line, while a liquefied natural gas tanker carrying cargo for India also exited the region. Iran’s Tasnim news agency separately reported that 33 vessels had passed through the strait after receiving approval from the Islamic Revolutionary Guard Corps Navy.
Analysts say a full reopening of the Strait of Hormuz would provide significant relief for major Asian energy importers such as China, Japan, South Korea, and India, all heavily reliant on Middle Eastern fuel supplies. Falling oil prices have also raised expectations of easing inflationary pressure globally. Kevin Hassett, a senior economic adviser to Trump, said energy prices could “plummet” if a deal is reached, potentially allowing the US Federal Reserve greater flexibility to consider future interest rate cuts.
Also Read: Oil Prices Rise As Iran Conflict Continues To Tighten Global Energy Supplies
