Oil Falls Sharply in Hopes of US-Iran Deal

Oil prices dropped sharply on Monday, hitting their lowest levels in two weeks as markets responded to growing optimism over a possible agreement between the United States and Iran that could reopen the strategic Strait of Hormuz.

North Sea Brent crude fell nearly 6% to below $98 a barrel, while US West Texas Intermediate (WTI) dropped to around $91.

President Donald Trump said at the weekend that Washington and Tehran had "largely negotiated" the framework for a peace deal. The Strait of Hormuz is critical to global energy markets: before the conflict, roughly one fifth of the world's oil and liquefied gas supplies passed through it.

Analysts warn, however, that the negotiations remain beset by fundamental disputes and that an agreement is far from final. Trump has also acknowledged instructing his negotiators not to rush towards a deal.

Even if an agreement is reached, experts say it could take months for oil flows through Hormuz to return to normal, with several oil and gas facilities in the region having sustained damage during the conflict.

US energy companies are also responding to developments. The number of active oil and gas wells in the country rose for the fifth consecutive week, reaching its highest level since June last year.

(reuters, max)