Oil Prices Slide on Iran Deal Hopes as Hormuz Ships Stir

The BBC reported Monday that oil prices fell sharply in Asian trading after US President Donald Trump suggested a peace agreement with Iran was close, lifting expectations that the Strait of Hormuz could finally reopen to energy shipping.

Brent crude slid more than 5% to just under $98 per barrel. US-traded crude dropped nearly 6% to around $91. Both benchmarks remain well above pre-conflict levels near $70 per barrel.

Trump Says Deal Is “Largely Negotiated”

Trump posted on social media Saturday that an agreement between Washington, Tehran, and several regional partners had been largely concluded. He said final details were still being worked through and would be announced soon. He also described a call with Israeli Prime Minister Benjamin Netanyahu as going “very well.”

However, Trump walked back the urgency the next day. He told his negotiating team on Sunday not to rush. His social media post urged both sides to take their time and avoid mistakes.

Iranian foreign ministry spokesman Esmaeil Baqaei told state television that US and Iranian positions had moved closer over the past week. He cautioned that convergence did not guarantee agreement on core issues and accused American negotiators of sending contradictory signals.

Background: A War That Shut Down Global Energy Flows

The conflict began on 28 February when Iran threatened to block vessels attempting to transit the Strait of Hormuz. The narrow waterway typically carries roughly a fifth of global oil and liquefied natural gas supplies. Its effective closure since then has sent energy prices sharply higher and strained supply chains across Asia and Europe.

Tehran also struck Israel and US-allied Gulf states including Saudi Arabia, Bahrain, and the United Arab Emirates. A ceasefire took hold in early April, followed by weeks of diplomatic engagement between Washington and Tehran.

Asian Markets Rally on Energy Optimism

Japan’s Nikkei 225 climbed above 65,000 for the first time, gaining nearly 3% as investors priced in relief for Tokyo’s energy-import costs. South Korea, another heavily Gulf-dependent economy, also saw equity gains. UK and US markets were closed Monday for public holidays.

Energy analyst Saul Kavonic of MST Financial told the BBC that while the prospect of a deal offers near-term price relief, oil markets are likely to remain tight through 2027. He cited the time needed to restore normal tanker flows, repair damaged production infrastructure, and replenish global inventories that have seen record drawdowns since the war began.

Timing and final terms remain unresolved, leaving traders cautious about declaring a full reversal in the energy price spike.

Read Next: Trump Says Iran Deal “Largely Negotiated,” Hormuz Reopening on Table