Oil Prices Drop On Report That U.S.-Iran Deal Would Reopen Hormuz Strait For Commercial Shipping Within a Month

Oil prices dropped on Wednesday following a report claiming that a deal between the U.S. and Iran would see the reopening of the Hormuz Strait for commercial shipping with a month.

Brent crude, the international benchmark, fell by 3.60% at 9:14 a.m. and clocked in at $93.19. West Texas Intermediate, the U.S. benchmark, dropped 4.78% and stood at $89.38 at the same time.

Citing Iranian state TV, Reuters detailed that the framework would also remove U.S. troops from the vicinity of Iran and end its own naval blockade. The agreement would not apply to military vessels.

The framework, the state TV noted, also “envisages Iran managing ship traffic through the strait in cooperation with Oman.” It noted that it has not been finalized yet.

If a final agreement is reached within 60 days, it could be passed as a binding UN Security Council resolution.

Both U.S. and Iranian officials have been hinting at the chances of a deal being made soon. Secretary of State Marco Rubio said it could take “a few more days.”

Speaking to press, Rubio said President Donald Trump is “either going to make a good deal or no deal” but that “may take a little while, I mean, a few more days.”

The remarks took place after the Central Command (CENTCOM) said it had targeted Iranian forces to protect its troops, but emphasized the ceasefire is still in place.

“Targets included missile launch sites and Iranian boats attempting to emplace mines. U.S. Central Command continues to defend our forces while using restraint during the ongoing ceasefire,” said CENTCOM spokesperson Capt. Tim Hawkins in a statement on Monday.

Rubio linked the strike with the reopening of the Strait of Hormuz, saying the key waterway through which about a fifth of the world energy passes needs to be “open, unimpeded, without tolls.” Iran has expressed its intention to charge ships to compensate for damages sustained during the war.

“And obviously that needs to happen immediately as soon as anything’s agreed to.”

The Iranian Islamic Revolutionary Guard Corps (IRGC), on its end, said it has the “legitimate” right to respond.

The revolutionary guard also said it downed a U.S. drone and shot at other aircraft that had entered the country’s airspace. It did not specify when the incidents happened.