Oil prices Iran deal hopes send Brent crude tumbling as reports of a Strait of Hormuz agreement spark sharp market movement

Global oil markets moved dramatically on Monday. Brent crude dropped more than 5 percent in early Asian trading. It fell below $100 to $98.27 per barrel. West Texas Intermediate slid to $91.63 at the time of reporting. The oil prices Iran deal connection drove the sharp decline. Moreover, reports emerged that an agreement to reopen the Strait of Hormuz is close to completion. The drop marks one of the most significant single-session moves in oil markets since the conflict began.

The proposed framework covers several major elements. It aims to reopen the Strait of Hormuz and end the war. It also requires Iran to scale back its enriched uranium programme. Furthermore, an initial phase includes a 60-day ceasefire extension and restoration of maritime traffic through the Strait. Iran’s Tasnim news agency reported that vessel traffic could return to pre-war levels within 30 days. However, that depends entirely on whether an agreement is actually finalised.

Market sentiment remains cautious. Trump posted over the weekend that he told his negotiators “not to rush into a deal.” A senior US official later confirmed progress but said no agreement would be signed on Sunday. Therefore, traders are balancing optimism against genuine uncertainty.

The framework also reportedly includes a ceasefire between Israel and Hezbollah. However, Israeli Prime Minister Netanyahu said any deal must eliminate the nuclear threat entirely. Additionally, Iranian Foreign Ministry spokesperson Esmail Baghaei confirmed the memorandum is in its final stages. Still, nuclear details remain unresolved.

Recovery timelines add another layer of complexity. Damaged infrastructure and disrupted shipping routes take time to restore. Therefore, oil supply relief may not arrive as quickly as markets are pricing in. Finally, every headline from the negotiating table will keep moving prices in the days ahead.