Oil prices fell more than 4% on Tuesday as diplomatic efforts to ease tensions between the United States and Iran gathered pace, raising expectations of an agreement to reopen the Strait of Hormuz.
International benchmark Brent crude futures for October traded at $79.96 per barrel at 4.41 p.m. local time (1341 GMT), down 4.5% from the previous close of $83.77, marking the first drop below the $80 level since July 13.
US benchmark West Texas Intermediate (WTI) futures traded at $76.33 per barrel, down 5% from $80.34 in the previous session.
US Treasury Secretary Scott Bessent said negotiations with Iran were continuing and that Washington and Tehran could reach an agreement as early as Tuesday or Wednesday to reopen the Strait of Hormuz.
"We are in talks with the Iranians," Bessent told CNBC on Tuesday. "There is a chance we may have a deal today or tomorrow to open the Strait and move towards a more normalized position in this conflict."
Asked whether Iran would be allowed to charge transit fees, Bessent said any agreement would ensure freedom of navigation through the strategic waterway.
Iranian Foreign Ministry spokesman Esmaeil Baghaei, however, said Tehran was not engaged in direct negotiations with Washington and that talks conducted through Omani mediation were focused on ensuring the safe passage of commercial vessels through the Strait of Hormuz.
US President Donald Trump also said on Monday that talks with Iran were continuing, describing the current diplomatic process as "Iran's last chance" to reach a favorable agreement.
- Diplomatic efforts ease supply concerns
Diplomatic initiatives led by Qatar have also reinforced expectations of easing regional tensions.
Qatari Foreign Ministry spokesperson Majed Al-Ansari said Doha remained in contact with both Washington and Tehran in an effort to reduce tensions, adding that Qatar's priority was to return the parties to diplomacy and restore international shipping through the Strait of Hormuz.
Al-Ansari said Qatar aimed to bring Iran and the United States back to the negotiating table, while cautioning that no agreement had yet been reached.
"There is currently no clear timeline for reaching an agreement," he said, expressing hope that a deal would be concluded "as soon as possible."
The intensification of diplomatic contacts and growing expectations of a ceasefire agreement between the US and Iran have eased concerns over potential supply disruptions, putting downward pressure on oil prices.
Meanwhile, OPEC+'s decision to proceed with a planned production increase of 188,000 barrels per day in September also contributed to the decline in oil prices.
By Duygu Alhan
Anadolu Agency
energy@aa.com.tr
