Oil Drops on Iran Deal Hopes
Yahoo Finance Australia reported Sunday that oil futures fell sharply after President Donald Trump suggested Washington and Tehran were on the verge of announcing a breakthrough agreement, raising expectations the Strait of Hormuz could reopen to commercial shipping.
Brent crude dropped 4.6% to $98.80 a barrel in early futures trading Sunday. That followed a Friday close above $103. West Texas Intermediate fell a similar 4.7%, slipping to around $92 a barrel after ending last week above $96.
Trump Signals a Deal, Then Pulls Back
The selling pressure began after Trump posted Saturday evening to Truth Social. He said a framework agreement involving the US, Iran, and several other nations would be announced shortly. The deal would set the stage for renewed peace negotiations and reopen the critical shipping lane.
By Sunday, his tone shifted. Trump cautioned that the US would not rush the process. He said time was “on our side.” A later post acknowledged the agreement was “not even fully negotiated yet.” Secretary of State Marco Rubio said further details could emerge Sunday.
Trump also confirmed the US naval blockade of the Strait of Hormuz would stay in place until a final, concrete deal was signed.
Background: A Conflict That Rocked Global Energy Markets
The Strait of Hormuz has been effectively closed to commercial vessel traffic since the conflict began in late February. According to International Energy Agency data, roughly one billion barrels of oil have been removed from global supply since fighting started. That represents the largest supply shock in recorded history.
Iran’s foreign ministry said the two sides were in the “final stage” of drafting a memorandum of understanding. However, state-linked Iranian media reported Sunday the deal could still collapse. Tehran reportedly wants frozen Iranian assets released by the US Treasury as part of any agreement. Washington has so far resisted that demand.
Also Read: Why the Strait of Hormuz Is the World’s Most Critical Oil Chokepoint
Nuclear Issue Remains a Sticking Point
Supreme Leader Ayatollah Mojtaba Khamenei complicated talks last week. He issued a rare public directive forbidding any removal of Iran’s stockpile of near-weapons-grade enriched uranium from the country. That directly contradicts a stated US red line. Trump and senior officials have consistently maintained Iran cannot be permitted to develop or retain nuclear weapons capability.
Any final agreement would defer nuclear program details to later negotiating rounds, according to multiple reports.
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