Oil Plunges On Renewed Hopes Of U.S.-Iran Deal That Reopens Strait Of Hormuz
Oil is plunging on Monday on renewed hopes of a deal between the U.S. and Iran that will reopen the Strait of Hormuz and could pave the way to end the war.
Brent crude, the international benchmark, dropped 5.48% on Monday at 11:18 a.m. ET, clocking in at $94.72 per barrel, while West Texas Intermediate, the U.S. benchmark, fell by more than 6% and stood at $90.78 at the same time.
Iranian state media said that 32 commercial vessels had been allowed to transit through the key waterway, with more expected to follow.
Secretary of State Marco Rubio showed optimism about a potential deal on Monday, saying it could take place on the same day, while Tehran cautioned that “no one can claim” that progress made “means an imminent agreement is about to be signed.”
Speaking to reporters as he geared up to leave India following an official visit, Rubio said the Trump administration “thought we might have some news last night, maybe today” but said he “wouldn’t read too much into it.”
“We have what I think is a pretty solid thing on the table in terms of their ability to open up the straits, get the straits open,” Rubio added. “It has a lot of support in the Gulf. … Every country that we’ve walked through it (with) understands it’s not just very reasonable, but it’s the right thing for the world to get done.”
He went on to express confidence that the first stage of the deal, which would see the reopening of the Strait of Hormuz in exchange for the U.S. lifting its blockade and providing some financial relief to Tehran, will create the conditions for a comprehensive nuclear deal. However, he also cautioned that if a satisfactory agreement is not reached, the Trump administration will deal with the country in “another way.”
Should it be signed, the deal in question would give both sides 60 days to reach a full deal that includes the nuclear issue, which nonetheless remains thorny. President Donald Trump has vowed to not let Iran get close to having a nuclear weapon, while Tehran has defended its right to enrich uranium and has not signaled willingness to give up its stockpile.
Iran’s top negotiator, Mohammed Qalibaf, and Foreign Minister Abbas Araghchi traveled to Qatar on Monday to meet with negotiators and flesh out remaining issues to close the deal, according to Al Jazeera. The outlet quoted an Iranian official who said the meeting would largely focus on the country’s frozen assets, including the amount to be released and a timeline for it.
