Oil drops as U.S. says deal with Iran and Hormuz reopening is near

Global crude benchmark Brent fell as much as 5.2% to $98.12 a barrel, while West Texas Intermediate was near $92. Trump said in social-media posts he wouldn’t “rush” into a deal, which “isn’t even fully negotiated yet.” Any final approval may take several days, according to senior US officials.

Still, it remains unclear how key differences, including the fate of the Islamic Republic’s nuclear program, will be addressed. Iran’s Tasnim news agency said the draft agreement could still collapse because the US was obstructing some key clauses, including a demand that its assets be unfrozen.

Global energy markets have been upended by the crisis, which began in February when the US and Israel attacked Iran. The conflict spread rapidly across the Persian Gulf region, forcing producers to shut in millions of barrels of daily crude supplies. Hormuz — which links the region to global markets — has been subject to a double blockade by both Tehran and Washington.

A full reopening of the waterway — which in peacetime typically handled around a fifth of the world’s oil and liquefied natural gas supplies — would be a relief for energy importers across Asia, including China, Japan, and South Korea.

“A lot of oil was trading on worst case assumptions for weeks,” said Haris Khurshid, chief investment officer at Chicago-based Karobaar Capital LP. “But once it became clear talks were still alive and escalation wasn’t accelerating, a chunk of that fear premium comes out pretty fast.”

Trump has been facing growing domestic political pressure to end the conflict, particularly ahead of the November midterm elections that will determine control of Congress. The war has boosted the cost of fuels, with average US gasoline prices hitting the highest since 2022 this month.

Kevin Hassett, Trump’s chief economic adviser at the White House, told Fox News on Sunday he expects energy prices to drop once there’s a deal, which could then create space for the Federal Reserve to cut rates. “We expect energy prices, as soon as there’s a deal, to plummet,” Hassett said.

Trading in oil may be lower than usual on Monday, with some traders away from their desks for public holidays in the US and the UK.