International oil prices fell by nearly 7% this Monday following growing optimism that the United States and Iran may be moving closer to a peace agreement that could lead to the reopening of the Strait of Hormuz. However, both sides have downplayed expectations of an immediate breakthrough.
According to Reuters, Brent crude oil prices dropped by $7.24, nearly 7%, reaching $96.30 per barrel at 1843 GMT. Meanwhile, U.S. West Texas Intermediate (WTI) crude declined by $6.30, or 6.5%, settling at $90.88 per barrel.
Peace Talks Continue in Qatar
A source close to the negotiations revealed that Iran’s chief negotiator and foreign minister are currently in Doha, Qatar, where they are holding talks with the Qatari Prime Minister regarding a possible agreement between Iran and the United States aimed at ending the three‑month‑long conflict.
Both parties indicated that progress has been made on a draft agreement that could end the fighting and introduce a 60‑day ceasefire while final negotiations continue.
Analysts See Hope for the Reopening of the Strait of Hormuz
Phil Flynn, an oil market analyst at Price Futures Group, said there is growing optimism that oil shipments could soon resume through the Strait of Hormuz. Although no final agreement has yet been reached, Flynn stated that markets are encouraged by signs that diplomatic efforts are advancing.
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The Strait of Hormuz is considered one of the world’s most important oil transportation routes, and any disruption there significantly affects global energy markets.
Concerns Remain Despite Diplomatic Progress
Despite the positive signals, some experts remain cautious. Rory Johnston, founder of Commodity Context, warned that previous negotiations had also shown promise before collapsing due to unresolved disagreements. He noted that the Strait of Hormuz remains closed, and uncertainty surrounding the negotiations continues to weigh heavily on the market.
U.S. President Donald Trump also commented on the talks through his Truth Social platform, saying discussions with Iran were progressing well, while warning that additional military strikes could occur if negotiations fail. Trump further urged Arab and Muslim nations to support agreements initially launched during his first term to improve relations between Arab countries and Israel.
Recovery of Oil Supply Could Take Months
Iran’s Ministry of Foreign Affairs confirmed that discussions aimed at ending the conflict are ongoing, but clarified that Iran’s nuclear weapons program is not part of the current negotiations. Even if a peace agreement is reached, analysts believe it may take several months for global oil transportation and supply chains to fully recover because many oil and gas facilities damaged during the conflict are still under repair.
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June Goh, an analyst at Sparta Commodities, explained that the current market shortage of between 10 and 11 million barrels per day cannot be resolved immediately. She added that the market will continue relying on existing reserves until Middle Eastern oil operations fully resume. Giovanni Staunovo, an analyst at UBS, also emphasized that oil transportation through the Strait of Hormuz remains limited and continues to be one of the key factors influencing the global oil market.
