Oil prices fell sharply on Tuesday, hitting a three-week low after US officials indicated progress in negotiations with Iran to reopen the Strait of Hormuz, a vital global shipping route.
The price of Brent crude, the international benchmark, declined by almost 5% to below $80 per barrel. Similarly, US West Texas Intermediate crude dropped over 5% to $76 per barrel, reaching their lowest levels since mid-July.
Diplomatic Talks Signal Potential Resumption of Shipments
US Secretary of State Marco Rubio and Treasury Secretary Scott Bessent both reported advances in discussions with Iran and Oman aimed at allowing commercial vessels to pass through the strait. Bessent suggested a deal could be finalized as early as Tuesday or Wednesday, potentially restoring freedom of navigation in the area.
"There's been progress made in those talks, but not finality yet," Rubio told reporters, adding hopes for a swift resolution.
Impact on Global Fuel Prices
The Strait of Hormuz handles about 20% of the world's daily oil and liquefied natural gas shipments. Its closure since late February has contributed to higher fuel prices worldwide.
- In the UK, petrol prices have surged to £1.60 per litre, levels not seen since the conflict began.
- In the US, average gasoline prices exceed $4 per gallon, with diesel nearing $5.40 per gallon.
Ongoing Challenges and Mediation Efforts
While talks continue, no formal agreement has yet been announced. Qatar remains engaged in mediation efforts but confirmed no direct talks between the US and Iran are currently scheduled. Iran maintains it is not negotiating with the US, instead holding discussions with Oman.
Earlier, US President Donald Trump warned Iran of a "last chance" to reach a deal to reopen the strait, having previously called off significant military strikes to allow diplomacy to proceed.
