Oil prices fall as US and Iran signal progress in peace talks

Oil prices fell sharply on Monday after officials said negotiators were making progress on a possible deal aimed at ending the US-Israel war with Iran. The move came as markets reacted to signs that the Strait of Hormuz, a vital shipping route for global energy supplies, could be reopened if an agreement is reached. Brent crude dropped 5.5% to $97.90 a barrel in morning trading and was still around $97.70 later in the day.

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US Secretary of State Marco Rubio said negotiators had a "pretty solid thing on the table" and that an agreement might be reached on Monday. He said the talks were still "a work in progress" and added that he and others had expected possible news the previous night or later on Monday. US President Donald Trump had earlier said he had instructed negotiators "not to rush into a deal", after previously suggesting one was close.

Iran also signalled movement in the talks, but stopped short of saying a deal was near. Foreign ministry spokesman Esmail Baqai said agreement had been reached on a "large portion of the issues under discussion". He added that it would not be accurate to say signing was imminent.

The comments helped drive the market reaction, but they also underlined that the process remained incomplete. The Strait of Hormuz is one of the world's most important energy chokepoints, with around a fifth of global oil and liquefied natural gas usually passing through it. According to the information provided, the route has been effectively closed since the conflict began on 28 February.

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Any reopening would matter not only for shipping but also for prices, supply expectations and the wider stability of energy markets. Trump said on Saturday that he had spoken with the leaders of Saudi Arabia, the United Arab Emirates, Qatar and others about a "Memorandum of Understanding pertaining to PEACE". He also said an agreement had been largely negotiated, subject to finalisation between the United States, Iran and other countries listed in his remarks.

In a separate call, he said his conversation with Israeli Prime Minister Benjamin Netanyahu had gone "very well". The latest price move comes after weeks of volatility in global energy markets. The supplied material says crude prices have swung sharply since early March after Iran threatened to attack ships trying to use the Strait of Hormuz in retaliation for US and Israeli attacks on the country.

Even after Monday's fall, Brent remained well above the roughly $70 a barrel level seen before the war. What remains unclear is whether the talks will produce a signed agreement, when any reopening of the shipping route might happen, and how quickly markets would respond if they do.

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