Oil prices fell to a three-week low on Tuesday as senior US officials raised hopes of a deal with Iran to reopen the key Strait of Hormuz waterway, according to BBC Business. US Secretary of State Marco Rubio and Treasury Secretary Scott Bessent both announced that talks had progressed enough for shipments to potentially resume as soon as this week. Brent crude, the global benchmark for oil prices, fell by almost 5% to under $80 on the news that supply disruptions could be eased, the BBC reported. US West Texas Intermediate (WTI) prices were down more than 5%, to $76 a barrel, with both contracts dropping to their lowest levels since 13 July.
Talks progress, but no finality yet
US Secretary of State Marco Rubio said there had been progress made in discussions with Iran and Oman on getting more ships through the Strait, according to BBC Business. Rubio told reporters at the State Department:
There's been progress made in those talks, but not finality yet. We're hoping that will happen very shortly.
Treasury Secretary Scott Bessent told CNBC that a deal to reopen the Strait of Hormuz could be agreed as soon as Tuesday or Wednesday. "There's a chance we may have a deal today or tomorrow to open the strait and move towards a more normalized position in this conflict," Bessent said. Asked whether Iran would be allowed to charge for ships passing through, he added: "It would be freedom of movement." No details of what a potential deal may look like have been released, the BBC reported.
Price action across benchmarks
The decline on Tuesday extended a period of volatility for the oil market. Previous negotiations in recent months failed to de-escalate the conflict between the US and Iran, the BBC noted, and drivers have ultimately been hit by higher fuel prices at the pumps. The table below summarises the latest moves for the two main US and international benchmarks:
| Benchmark | Price change | Latest price | Lowest level since |
|---|---|---|---|
| Brent crude | Fell almost 5% | Under $80 a barrel | 13 July |
| West Texas Intermediate | Down more than 5% | $76 a barrel | 13 July |
Both contracts dropped to their lowest levels since 13 July on Tuesday, according to BBC Business.
Why Hormuz matters
The Strait of Hormuz has been a central point in negotiations between the US and Iran, the BBC reported. Before the conflict began in late February, the waterway handled about one-fifth of global daily oil and liquefied natural gas supplies. Key supply-side facts:
- The waterway is central to talks between Washington and Tehran, according to BBC Business.
- It handled about one-fifth of global daily oil and LNG supplies before the conflict began in late February.
The potential resumption of shipments has raised hopes of easing supply disruptions that have contributed to a volatile energy market, the BBC reported, with US officials saying a deal could be finalised within days. No details of a potential agreement have been released, leaving both benchmarks at their lowest levels since 13 July, according to BBC Business.
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