Global oil prices fell sharply in early Asian trading on Monday after reports emerged that negotiations to reopen the Strait of Hormuz were entering their final stages, raising hopes of easing supply disruptions in one of the world’s most critical energy corridors.
Both major oil benchmarks dropped by more than five percent amid growing optimism that a breakthrough agreement could soon be reached between the United States, Iran, and regional actors involved in the conflict.
At the time of writing, Brent crude fell below the $100 mark to trade at $97.49 per barrel, while West Texas Intermediate (WTI) slid to $90.63.
The sharp decline reflects expectations that oil shipments through the Strait of Hormuz could gradually resume after weeks of geopolitical tensions and military conflict disrupted global energy markets.
Trump Signals Caution Despite Progress
Investor optimism was slightly tempered after U.S. President Donald Trump indicated that Washington was unwilling to rush into a final agreement.
Trump wrote on social media that he had instructed American negotiators “not to rush into a deal,” even as talks appeared to be advancing. A senior U.S. administration official later confirmed that substantial progress had been achieved but noted that no agreement would be signed on Sunday.
According to officials familiar with the negotiations, the proposed agreement would reopen the Strait of Hormuz, extend the current ceasefire for 60 days, and establish a framework for continued nuclear negotiations with Iran. The arrangement would also reportedly require Tehran to give up its stockpile of enriched uranium.
Iran’s semi-official Tasnim news agency reported that vessel traffic through the Strait could return to pre-war levels within 30 days if the agreement is finalized.
Ceasefire and Nuclear Issues Remain Sensitive
The proposed framework also includes provisions aimed at ending the conflict between Israel and Hezbollah, although Israeli Prime Minister Benjamin Netanyahu reiterated that any agreement with Iran “must eliminate the nuclear danger.”
Meanwhile, Iranian Foreign Ministry spokesperson Esmail Baghaei said discussions over the memorandum of understanding were nearing completion, but cautioned that detailed nuclear issues were not yet part of the current stage of talks.
Analysts say a successful agreement could provide much-needed stability to oil markets after weeks of volatility triggered by fears of supply shortages and shipping disruptions.
However, uncertainty remains over how quickly damaged oil and gas infrastructure can be restored and whether oil flows can return fully to pre-war levels.
Energy experts also warn that without a permanent arrangement guaranteeing uninterrupted access through the Strait of Hormuz, the risk of another geopolitical energy crisis could continue to weigh on global markets.
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