Oil prices experienced a tumultuous day, initially rising but then falling sharply after U.S. Treasury Secretary Scott Bessent stated that a deal to reopen the Strait of Hormuz might be reached "today or tomorrow." Brent crude, the international benchmark, slid from $79 to $75, a drop of 5%. This decline was fueled by the prospect of increased oil flows through the critical waterway, which typically handles a fifth of the world's traded oil and gas and has been largely shut down by Iranian attacks.
Despite the potential deal, some analysts remain cautious. Ryan McKay, director of commodity strategy at TD Securities, expressed skepticism, stating that oil exports through Hormuz are unlikely to surge significantly. McKay noted that current flows are already aligned with existing production recovery, suggesting that even a comprehensive deal would offer minimal upside for increased flow. He further indicated that Iran is unlikely to agree to any deal without control over the Strait, making a successful agreement improbable in his view.
Negotiations between Iran and Oman have shown progress, with an emerging agreement suggesting ships would enter the Persian Gulf via an Iranian-controlled route and exit through an Omani-controlled route, with service fees for security and environmental preservation. However, officials stated that a final agreement could differ and would be contingent on lifting the U.S. blockade on Iran's ports. U.S. Secretary of State Marco Rubio and Iranian Foreign Ministry spokesman Esmaeil Baghaei have both confirmed progress in talks, though details regarding traffic control, security, and potential fees remain unresolved. President Trump has framed this as Iran's "last chance" for a deal, linking the reopening of the Strait to eventual denuclearization.
