Oil prices tumble after Bessent says Strait of Hormuz deal may come this week
📰 source: cnbc_topnews · 💼 business
oil prices fell sharply tuesday after treasury secretary scott bessent indicated there may be a deal to open the strait of hormuz as soon as this week. brent, the international oil benchmark, slid 5.3% to close at $79.36 per barrel. west texas intermediate futures lost 5.7% to settle at $75.77.
bessent told cnbc's "squawk box" that "we are in talks with the iranians" and "there is a chance we may have a deal today or tomorrow to open the strait and move towards a more normalized position in this conflict." when asked whether iran would be allowed to charge a toll, he said "it would be freedom of movement." tehran is considering allowing european countries to clear mines from hormuz, diplomats told bloomberg news. mines in the strait are one of the biggest obstacles to normalizing traffic. president donald trump said over the weekend he called off a major attack on iran to allow for negotiations. the u.s. and iran signed a deal on june 17 to reopen the strait, but that agreement quickly collapsed. iran wants commercial ships to transit through its own territorial waters and has repeatedly attacked vessels sailing along oman's coast under u.s. military protection.
a cargo ship was struck monday by an unknown projectile about 20 nautical miles northeast of al khasab, oman, per a report from the united kingdom maritime trade operations centre. ryan mckay, director of commodity strategy at td securities, said any deal is "highly likely to fail" because iran wants control of the strait. he also noted flows "are already in line with what the current production recovery would imply," so upside even under a deal is minimal.
why it matters: oil prices plunge on possible hormuz deal, but skepticism high and pre-existing flows limit upside.
source: cnbc_topnews
sentiment: +0.30 · impact: 0.90