Oil Prices Ease Sharply on U.S.-Iran Peace Outlook
Oil prices fell by more than 5% on Monday as the US and Iran drew closer to a peace agreement. Brent crude traded at $95.10 per barrel, down around 5.1% from the previous close of $100.21.
US benchmark West Texas Intermediate (WTI) decreased about 5.6% to $91.20 per barrel, compared with $96.60 in the previous session. The decline was driven by statements signalling progress in talks between Washington and Tehran.
US President Donald Trump said Sunday in a post on his social media platform Truth Social that negotiations with Iran are “orderly and constructive,” while stressing that the naval blockade would remain in place until a final agreement is reached.
Trump also said US-Iran relations are becoming “much more professional and productive,” while warning that Tehran must not develop or acquire a nuclear weapon.
US Secretary of State Marco Rubio said Monday that there might be news “maybe today” regarding the talks.
“Work still in progress. We thought we might have some news last night, maybe today…,” Rubio told reporters in India’s capital, New Delhi, as he traveled to the city of Agra to visit the Taj Mahal.
Rubio added that there is “a pretty solid thing on the table in terms of their ability to open up the straits, get the straits open, and enter into a very real, significant, time-limited negotiation on the nuclear matters.”
These developments raised expectations that the two countries could be moving toward an understanding that would allow the Strait of Hormuz to regain full functionality and ensure uninterrupted oil supplies.
However, experts note that oil flows through the Strait may take months to return to normal until repairs to damaged oil and gas facilities are completed.
Meanwhile, unresolved disagreements remain between Iran and the US over several elements of a potential deal, including the release of frozen Iranian assets, raising doubts about the chances of reaching an agreement, according to Iran’s semi-official Tasnim News Agency.
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