Global crude oil benchmarks experienced a significant downturn, falling more than 4% on Sunday, following President Donald Trump's declaration that discussions with Iran regarding the reopening of the crucial Strait of Hormuz were progressing in a "constructive manner." Despite the positive update, Trump reiterated that the United States would not rush to finalize a deal.
West Texas Intermediate (WTI) futures, a key indicator for U.S. crude, dropped approximately 5% to reach $91.65 per barrel by 7:13 p.m. ET. Similarly, international benchmark Brent crude futures also saw a decline of around 5%, trading at $98.30 per barrel.
"The negotiations are proceeding in an orderly and constructive manner, and I have informed my representatives not to rush into a deal in that time is on our side," Trump stated in a social media post on Sunday.
This follows his Saturday announcement that an agreement with Iran concerning Hormuz, among other contentious issues, was largely negotiated and anticipated to be unveiled soon. While such pronouncements from Trump have previously offered glimpses of resolution, they have often been followed by renewed escalation of tensions, leading to further spikes in oil prices.
Last week alone saw U.S. crude shed over 8% and Brent lose more than 5% as Trump called off impending airstrikes against Iran, citing a preference for continued negotiations. However, oil prices have surged by more than 30% since the U.S. and Israel conducted attacks against Iran on February 28.
Since early March, Iran has maintained a de facto blockade of shipping through the Strait of Hormuz, demanding permission for vessels to pass or face potential attack. This blockade was implemented following U.S. and Israeli airstrikes that resulted in the deaths of Iran's head of state, Ayatollah Ali Khamenei, and other senior leaders.
The Strait of Hormuz stands as a critical bottleneck for the global oil market, historically facilitating the passage of approximately 20% of the world's supply. Iran's blockade has severely curtailed oil exports from the Middle East, leading to what is considered the most substantial supply disruption in history.
In retaliation, the U.S. has imposed its own blockade on Iranian ports and vessels. Trump affirmed on Sunday that the U.S. blockade would "remain in full force and effect until an agreement is reached, certified, and signed."
