Oil prices fell more than 5%, closing at their lowest levels in three weeks after signs of progress in diplomatic talks between the United States and Iran raised expectations that the crisis could ease and shipping through the Strait of Hormuz could resume.
Brent crude closed down 5.3% at $79.36 a barrel, while U.S. crude WTI dropped 5.7% to $75.77 a barrel. Both benchmarks hit their lowest levels since mid-July.
Rubio and Bessent on the talks
U.S. Secretary of State Marco Rubio said progress was being made in talks with Iran and Oman aimed at restoring shipping through the Strait of Hormuz, though he said no final agreement had yet been reached. U.S. Treasury Secretary Scott Bessent said a deal could be reached within days.
Qatar's involvement
Qatari foreign ministry spokesperson Majed Al Ansari said efforts toward a diplomatic solution to the conflict were continuing. Qatar's Emir and U.S. President Donald Trump discussed ways to ease the tension.
Market outlook
Analysts said prospects for a deal have reduced the geopolitical risk premium built into oil prices since the conflict with Iran escalated. They warned the market remains highly sensitive to political developments, since exports from the Persian Gulf remain affected and tanker transits through the Strait of Hormuz remain limited. Goldman Sachs estimated Brent would trade between $80 and $90 a barrel until either a new U.S.-Iran deal is confirmed or attacks in the region escalate significantly again.
