Oil Retreats as US-Iran Talks Raise Prospect of Hormuz Reopening

Brent crude futures fell nearly 5% toward $98 per barrel on Monday, extending losses from last week as signs of progress in negotiations between the United States and Iran eased concerns over prolonged disruptions in global energy markets.

According to reports, discussions between Washington and Tehran could pave the way for the reopening of the Strait of Hormuz, alongside a potential reduction in hostilities, the release of certain frozen Iranian assets, and additional diplomatic efforts aimed at limiting Iran’s nuclear activities.

Still, uncertainty surrounding the negotiations remained elevated. President Donald Trump stated that the United States would maintain its blockade measures around the Strait of Hormuz until a formal agreement is finalized, adding that Washington would not “rush” into a deal.

The possibility of restoring full access through Hormuz is being closely watched by global markets. The strategic waterway handles roughly one-fifth of worldwide oil and liquefied natural gas shipments, making it one of the most critical energy transit routes globally. A reopening could provide significant relief for major Asian economies heavily dependent on Middle Eastern energy imports and potentially place additional downward pressure on crude prices.

The recent escalation involving Iran and the dual blockade affecting Hormuz has disrupted global supply chains and forced several Middle Eastern producers to suspend millions of barrels per day in crude output, intensifying volatility across energy markets.