Oil prices drop after U.S. Treasury Secretary Scott Bessent indicated that Washington and Tehran could reach an agreement on reopening the Strait of Hormuz as early as Tuesday or Wednesday.
The price of Brent crude, the international benchmark, fell below $80 per barrel for the first time in the last three weeks shortly after Bessent’s announcement. Subsequently, the drop exceeded 5%.
Hopes for reaching an agreement also boosted stock markets. The S&P 500 index on Wall Street rose by 1.4%.
Scott Bessent stated on Tuesday to CNBC that negotiations with Iran are ongoing.
"There is a possibility that we may reach an agreement today or tomorrow for the opening of the strait and a return to a more normal situation in this conflict," he said, according to the Financial Times.
Two sources familiar with diplomatic efforts told the cited newspaper that Iranian and Omani negotiators have agreed on a temporary arrangement for the transit of ships through the Strait of Hormuz. However, the agreement still needs to be approved by Iran's leadership.
According to the agreement, ships would enter the strait through Iranian waters and exit through a channel mostly located in Oman's waters.
In an initial stage, Iran would send several ships on this route, including oil tankers and liquefied natural gas carriers, to verify if the area is free of mines and can be navigated safely. Subsequently, the strait would be reopened to other vessels, one of the FT sources stated.
If the agreement is reached, the United States would lift the naval blockade on Iranian ports and reintroduce a waiver to allow Iran to resume its oil exports, the source added.
Iran and Oman have been negotiating directly for several weeks on a new mechanism to manage naval traffic through the strait, which has become the main point of contention between the United States and the Islamic Republic.
Reaching an agreement between Tehran and Muscat is considered crucial to avoid further escalation and to resume negotiations between Iran and the U.S. to end the conflict.
U.S. President Donald Trump stated on Monday that negotiations with Tehran have resumed.