LONDON: Global oil prices fell sharply on Wednesday amid growing hopes that the United States and Iran could reach an agreement to reopen the Strait of Hormuz, easing concerns over disruptions to global energy supplies.
Brent crude briefly fell below $78 a barrel for the first time since July 13, while US West Texas Intermediate (WTI) crude also declined to around $74.50 a barrel, its lowest level in roughly three weeks.
The market reaction followed comments by US Treasury Secretary Scott Bessent, who said a deal between Washington and Tehran on reopening the Strait of Hormuz could be reached “today or tomorrow.” The remarks boosted investor confidence and triggered a reassessment of oil market expectations.
Analysts said a return to normal shipping through the strategic waterway could ease fears over global oil supplies and put further downward pressure on crude prices. However, they cautioned that uncertainty would remain until the US-Iran negotiations produce a formal agreement.
Qatar’s Foreign Ministry also described the latest diplomatic developments as encouraging, saying efforts to resolve the dispute had entered a highly positive phase.
Shipping and energy industry experts are closely monitoring vessel movements through the Strait of Hormuz to assess whether oil shipments are returning to normal. Market participants remain cautious, however, as details of any potential agreement have yet to be announced.
Brent crude had climbed to $100.69 a barrel on July 23 amid heightened tensions in the region. Prices have since fallen steadily as hopes of easing tensions and diplomatic progress have increased.
While US officials have indicated that negotiations are making progress, Iran has yet to issue a formal announcement on any potential agreement.
