WASHINGTON, D.C., August 5 — International oil prices tumbled on Tuesday after U.S. Treasury Secretary Scott Bessent stated that an agreement with Iran to reopen the strategic Strait of Hormuz could be reached within hours, potentially ending months of shipping disruptions that have roiled global energy markets.
Diplomatic Signals from Both Capitals
In a televised interview with CNBC on Monday, Bessent said the United States and Iran were in active negotiations and that a deal could come “today or tomorrow” to restore freedom of navigation through the waterway, through which approximately one-fifth of the world’s oil supply passes daily.
“We are in talks with the Iranians, and I think there is 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. When asked whether Iran would be permitted to charge transit fees, the treasury secretary replied that any agreement would guarantee “freedom of movement.”
Iranian Foreign Ministry spokesman Esmaeil Baghaei described ongoing talks between Tehran and Muscat as “positive” at both technical and political levels, telling state-run IRIB television that discussions focused on designating safe routes for commercial vessels. He emphasized that any arrangement must safeguard the sovereign rights and national security of both Iran and Oman.
Market Reacts Sharply
The prospect of a diplomatic breakthrough sent crude prices into a steep decline. West Texas Intermediate (WTI) futures fell 6.47 percent to close at $75.14 per barrel, while Brent crude dropped 6 percent to $78.74 per barrel — the largest single-day percentage decline in over a month. U.S. equity markets rallied in tandem, with the Nasdaq Composite gaining 2.59 percent and the S&P 500 rising 1.79 percent to record closing highs.
Qatar’s Foreign Ministry also weighed in on Tuesday, stating that all parties continued efforts to de-escalate regional tensions and that returning to a diplomatic track remained the priority, even as a final agreement had not yet been reached.
Context: Months of Disruption
The Strait of Hormuz has been effectively closed to commercial shipping since late February, following the outbreak of hostilities between the United States, Israel, and Iran. Although interim ceasefires and preliminary agreements were reached in subsequent months, none succeeded in permanently restoring traffic through the narrow channel between Iran and Oman.
U.S. Central Command reported on Monday that American naval forces had diverted 45 commercial vessels, disabled two ships, and boarded two others since enforcing the maritime blockade. Meanwhile, a cargo vessel was reportedly struck by an unidentified projectile off the coast of Oman near the strait’s entrance on Monday, with one crew member listed as missing.
Cautious Optimism, Unresolved Details
Despite the optimistic tone from Washington, significant uncertainties remain. An Iranian official was quoted on Monday accusing the United States of attempting to obstruct Tehran’s separate negotiations with Oman over management of the strait. And while President Donald Trump signaled over the weekend that military strikes against Iran had been deferred pending the outcome of diplomacy, he simultaneously described the current window as Iran’s “last chance.”
Analysts noted that even if an initial agreement is announced this week, implementation would depend on verification mechanisms and the willingness of all parties to sustain commitments that have fractured repeatedly since the conflict began nearly six months ago.
— VGMG Reporting