Oil Prices Fall on Hopes of US-Iran Peace Deal

Global oil prices dropped sharply while Asian stock markets rose after growing optimism that the United States, Iran and Israel could move closer to ending their conflict.

Marco Rubio said during a visit to India that negotiators had “a pretty solid thing on the table” and suggested an agreement could potentially be reached on Monday.

Following the comments, global benchmark Brent crude fell 5.5% to $97.90 a barrel, while US crude dropped 5.9% to $90.93.

Earlier, Donald Trump indicated that a possible agreement would involve reopening the Strait of Hormuz, the crucial shipping route through which about one-fifth of global oil and liquefied natural gas supplies normally pass.

The strategic waterway has effectively remained closed since fighting began on 28 February, creating major disruption in global energy markets.

Rubio said negotiations were still ongoing and cautioned against assuming a breakthrough was guaranteed, though he acknowledged progress had been made.

Trump also said over the weekend that he held a “very good call” with leaders from Saudi Arabia, the United Arab Emirates and Qatar regarding a “Memorandum of Understanding pertaining to PEACE”.

The US president stated that an agreement had been “largely negotiated” between Washington, Tehran and other involved countries, although final details were still being discussed.

Trump added that he also spoke with Israeli Prime Minister Benjamin Netanyahu and described the conversation as positive.

While Trump insisted any eventual deal would prevent Iran from obtaining nuclear weapons, he later warned that negotiators should “take their time and get it right”.

Iranian foreign ministry spokesman Esmaeil Baqaei said the positions of Tehran and Washington had moved closer in recent days, though he cautioned that major disagreements still remained.

Energy markets have experienced heavy volatility since early March after Iran threatened shipping in the Strait of Hormuz in response to attacks by the US and Israel.

Despite Monday’s sharp decline, oil prices remain significantly above pre-war levels, with Brent crude trading around $70 per barrel before the conflict began.

Analysts say any agreement could help stabilise energy markets, although full recovery may take years.

Saul Kavonic, head of energy research at MST Financial, said there was now “some light at the end of the tunnel” for oil markets, but warned that supply conditions could remain tight through 2027 due to the time needed to restore shipping routes, repair infrastructure and rebuild depleted global oil reserves.

Lars Jensen, chief executive of Vespucci Maritime and former Maersk director, said the shipping industry would still remain cautious even if a deal were announced quickly.