Oil Slides as U.S.-Iran Deal Hopes Ease Hormuz Fears

Oil Slides as U.S.-Iran Deal Hopes Ease Hormuz Fears

Oil prices dropped sharply on Wednesday after signs emerged that the U.S. and Iran could be moving closer to a temporary agreement to end the conflict and reopen the Strait of Hormuz. Brent crude briefly fell below $100 a barrel, while WTI also posted steep losses as traders priced in reduced supply risks.

Investor sentiment improved after reports suggested Washington and Tehran were discussing a framework deal that could pause hostilities, ease sanctions, and restore safe maritime traffic through the strategic oil chokepoint. Iran’s navy also signaled that “safe passage” through Hormuz would be ensured under new regional protocols.

U.S. President Donald Trump confirmed progress toward a possible agreement, though he warned that military action could intensify if negotiations fail. Tehran, meanwhile, said its immediate focus remains ending the war rather than discussing nuclear issues.

Markets reacted positively to the de-escalation signals, as the Strait of Hormuz handles roughly one-fifth of global oil flows. Analysts noted that reopening the route is critical because global inventories are tightening rapidly after weeks of disruption.

At the same time, new EIA data showed the United States increasing its role as a major global energy supplier during the crisis, with crude and petroleum product exports hitting record levels.