Oil falls as U.S. indicates deal with Iran and reopening of the Strait of Hormuz is approaching

(SeaPRwire) –   Crude prices declined as the United States and Iran moved closer to an agreement, even though President Donald Trump indicated that the American blockade of the Strait of Hormuz would persist until a final deal is reached.

The international benchmark, Brent crude, slid by up to 5.2% to $98.12 per barrel, while West Texas Intermediate hovered around $92. On social media, Trump stated he would not “rush” the agreement, noting it “isn’t even fully negotiated yet.” Senior US officials suggested that securing final approval could take a few days.

Nonetheless, it is still uncertain how major points of contention, such as the future of Iran’s nuclear program, will be resolved. According to Iran’s Tasnim news agency, the preliminary accord remains at risk of falling apart due to US opposition to critical terms, such as the unfreezing of Iranian assets.

International energy markets have faced severe disruption since the crisis erupted in February following US and Israeli strikes on Iran. The hostilities quickly escalated throughout the Persian Gulf, forcing oil producers to halt millions of barrels of daily output. The Strait of Hormuz, a vital conduit to global markets, has faced blockades from both Washington and Tehran.

Restoring full access to the shipping lane—which normally carries roughly 20% of global oil and liquefied natural gas shipments—would bring significant relief to major Asian energy buyers like China, Japan, and South Korea.

“For weeks, oil prices reflected worst-case scenarios,” remarked Haris Khurshid, chief investment officer at Karobaar Capital LP in Chicago. “However, once it was obvious that negotiations were ongoing and the situation wasn’t worsening, a significant portion of that risk premium quickly dissipated.”

Trump is under intensifying domestic political pressure to resolve the standoff, especially with the upcoming November midterm elections that will decide congressional control. The conflict has driven up fuel costs, pushing average US retail gasoline prices to their highest levels since 2022 this month.

Kevin Hassett, the White House chief economic adviser, stated on Fox News this Sunday that he anticipates a sharp drop in energy costs once an agreement is finalized, potentially giving the Federal Reserve room to lower interest rates. “We expect energy prices, as soon as there’s a deal, to plummet,” Hassett remarked.

Oil market activity could be quieter than normal on Monday, as market participants in both the US and the UK observe public holidays.