Oil Holds Decline on Hormuz Deal Hopes

Crude oil stabilized above $75 per barrel on Wednesday, but remains down about 10% so far this week as optimism grew over a potential interim agreement to reopen the Strait of Hormuz, boosting the supply outlook. On Tuesday, Qatar said an interim proposal had been prepared and both Washington and Tehran indicated that negotiations to restore access to the vital waterway were making progress. President Donald Trump had earlier called off planned military action against Iran to give diplomacy a chance, while reiterating his demand for the swift reopening of Hormuz. Meanwhile, Iran is reportedly weighing a proposal to allow European countries to clear mines from the strait and said discussions with Oman on securing safe shipping routes were advancing. Saudi Arabia also continued talks with Yemen’s Houthi militants through Omani mediators in an effort to keep the conflict in the Red Sea from escalating further.

Crude oil fell more than 5% to below $76 a barrel on Tuesday, reversing earlier gains as hopes for renewed diplomacy between the US and Iran eased concerns over supply disruptions. US Treasury Secretary Scott Bessent said that there is a chance of a deal today or tomorrow to open the strait. Also, Qatar said a proposed de-escalation resolution was being circulated between the parties. Both Qatar and Bessent cautioned there’s no solid agreement yet. Oil is now down roughly 10% this week after President Donald Trump delayed planned military action against Iran to allow more time for diplomacy. Trump warned Tehran it had a last chance to reach an agreement on the Strait of Hormuz or face renewed US strikes. However, prospects remain uncertain as Iran continues to insist on controlling maritime traffic through the strategic waterway. Any failure in negotiations could reignite military tensions, threatening energy supplies and driving oil prices higher once again.

Crude oil climbed toward $81.8 per barrel on Tuesday, recovering part of the previous session’s sharp losses as uncertainty persisted over efforts to resolve the US-Iran conflict. President Donald Trump said his proposal for talks represents Tehran’s final opportunity to reach a deal and expressed confidence that the Strait of Hormuz will reopen soon. Iran, however, denied that any direct talks with the US are underway, though it said discussions with Oman aimed at increasing shipping through the strait are making progress. Elsewhere, Turkey and Iraq extended a key oil pipeline agreement by another year, strengthening alternative export routes, while Kazakhstan resumed crude flows through the Caspian Pipeline Consortium after a brief disruption. Meanwhile, OPEC+ approved another modest production increase, completing the planned restoration of supply cuts introduced in 2023.