Oil falls more than 5% after upbeat comments on potential US-Iran agreement

Oil prices fell sharply on Tuesday after US Treasury Secretary Scott Bessent suggested that an agreement to reopen the Strait of Hormuz could be reached as early as this week.

In trading, global benchmark Brent crude dropped 5.3% to settle at $79.36 a barrel, while US West Texas Intermediate (WTI) crude fell 5.7% to close at $75.77 a barrel.

Prospects for an agreement

Speaking in an interview with CNBC, Bessent said: "We are in discussions with the Iranians, and there is a possibility we could reach an agreement today or tomorrow to reopen the Strait and move toward a more stable situation in this conflict."

Asked whether Iran would be allowed to impose transit fees on commercial vessels, Bessent replied: "There will be freedom of navigation."

According to diplomats familiar with the matter who spoke to Bloomberg, Tehran is considering allowing European countries to participate in clearing naval mines from the Strait of Hormuz, where sea mines remain one of the main obstacles to restoring normal shipping operations.

Easing tensions

Over the weekend, US President Donald Trump said he had halted plans for a large-scale strike against Iran to allow negotiations over the Strait of Hormuz to proceed. The United States and Iran had previously reached an agreement on June 17 to reopen the waterway, but that deal quickly collapsed.

Iran continues to insist that commercial vessels transit the Strait through its territorial waters and has repeatedly targeted ships sailing near Omani waters under US military protection.

In the latest security incident, the UK Maritime Trade Operations (UKMTO) agency reported that a commercial vessel was struck by an unidentified projectile on Monday about 20 nautical miles northeast of Khasab, Oman.

Despite the renewed optimism reflected in financial markets, analysts cautioned that the chances of a lasting agreement remain uncertain.