Oil Prices Fall to Multi-Week Low on Iran Deal Optimism

WASHINGTON — Oil prices dropped sharply this week, hitting their lowest levels in more than three weeks as optimism grows over a potential U.S.-Iran agreement that could reopen the Strait of Hormuz and ease supply concerns.

As of Monday, Brent crude was trading near $98.40 per barrel, down more than 5% for the week and marking its lowest level since early May. West Texas Intermediate (WTI) crude fell below $91.60 per barrel, also posting its lowest level in several weeks.

The decline is driven primarily by expectations that indirect talks between the U.S. and Iran are making meaningful progress. President Donald Trump stated this week that a framework deal is “largely negotiated,” with key elements including reopening the critical waterway and phased steps on Iran’s nuclear program. Markets are pricing in the possibility that a final agreement could restore significant Iranian oil exports that have been curtailed by the U.S. naval blockade.

Analysts note that the fragile ceasefire, while repeatedly tested, has held long enough to fuel hopes of de-escalation. Gulf allies have urged restraint, and recent diplomatic signals from both sides have contributed to the bearish sentiment in energy markets.

Despite the drop, oil remains elevated compared to pre-conflict levels due to ongoing uncertainty. Any delay or breakdown in talks could quickly reverse the recent declines, especially with the blockade still in place and Iranian threats to shipping persisting.

The price movement provides some relief at the pump for American drivers but also reflects broader market bets on the outcome of high-stakes Middle East diplomacy. Energy traders will closely watch developments over the coming days as the administration continues to balance pressure on Iran with efforts to reach a lasting agreement.