The US and Iran are reportedly close to securing an agreement that would reopen the strait of Hormuz, with global oil benchmark Brent falling by 5.5% to $97.90. However, reports suggest that a peace deal between the two countries is not fully negotiated yet, and that no agreement would be signed today.
Oil prices have plunged amid reports that the US and Iran are close to securing an agreement that would reopen the strait of Hormuz. Stock markets have risen in Asia, with global oil benchmark Brent down by 5.5% at $97.90 on Monday, while US-traded crude was 5.9% lower at $90.93 .
Reports now suggest that a peace deal between the US and Iran a deal is not "fully negotiated yet", and that no agreement would be signed today. US President Donald Trump wrote on Truth Social that "both sides must take their time and get it right".
However, secretary of state Marco Rubio said on Monday that a deal to with Iran could in materialise “today”. Talking about a potential deal, Rubio said in New Delhi: “We thought we might have some news last night, maybe today – I wouldn’t read too much into it. We have what I think is a pretty solid thing on the table in terms of their ability to open up the straits. It has a lot of support in the Gulf.
” 'I don't make bad deals': Trump says Iran talks 'constructive' but nations 'must take time' amid hopes for end to warThe Nikkei 225 stock index in Japan rose above 65,000 for the first time after gaining 3% amid renewed hope that the Strait of Hormuz would soon reopenTrump previously said the deal would include the reopening of the Strait of Hormuz, without giving further details. The waterway is where around a fifth of the world's oil and liquefied natural gas passes, and it has been closed since the conflict started on 28 February.
Trump said “negotiations are proceeding in an orderly and constructive manner” - but noted the US blockade on Iranian ports will remain until an agreement is signed. Middle East officials told the Associated Press on Sunday that the US was close to reaching a deal with Iran that would end the war, a vital conduit for global energy supplies and reopen the Strait of Hormuz.
Alamy According to US media, the deal under discussion involves a 60-day ceasefire extension, negotiations over Iran's nuclear programme, and the reopening of the Strait of Hormuz. The US and Israel have described the document as a "memorandum of understanding" - with suggestions it is an initial agreement to allow for further talks on some aspects.
The president did not give any further details on the deal, but has insisted any agreement would "absolutely" prevent Iran from obtaining a nuclear weapon. However, while oil prices have fallen, they still remain higher than before the war, when Brent was trading at around $70 a barrel. Saul Kavonic, head of energy research at MST Financial said: "There is now some light at the end of the tunnel, which will bring some near term oil price relief.
"But even in the most optimistic scenario from here, oil markets will remain tight through 2027 given the time required to normalise oil flows through the Strait, repair damaged oil facilities, and rebuild global oil stocks that have seen record depletion since the war began. "
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