Global oil prices tumbled to three-week lows on Tuesday as traders ramped up bets that the United States and Iran were on the verge of reaching an agreement to ease tensions in the Middle East, despite the absence of a formal deal.
Brent crude fell $4.61, or 5.5 percent, to $79.16 a barrel in afternoon trading, while US benchmark West Texas Intermediate (WTI) dropped $4.70, or 5.85 percent, to $75.64 a barrel, as markets priced in the prospect of the Strait of Hormuz reopening.
The sharp sell-off followed optimistic remarks from senior US officials. Scott BESSENT, Treasury Secretary, said an agreement could be reached as early as Tuesday or Wednesday, while Secretary of State Marco Rubio said negotiations involving Iran and Oman were making progress.
President Donald Trump further fuelled market optimism, describing a deal to reopen the Strait of Hormuz
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