Oil Prices Plummet as Hormuz Strait Reopening Prospects Improve

Oil prices plummeted more than $1 on Thursday, August 27, 2026, extending a streak of losses as negotiations between Iran and Qatar raised hopes that the Strait of Hormuz might reopen.

The waterway's potential reopening would alleviate supply disruptions caused by the war in the Middle East, which have seen oil flows drop to about one-quarter of their pre-war level, according to ship-tracking data. The Strait of Hormuz carried oil and LNG shipments equal to about a fifth of global consumption before the conflict began.

Iranian sources told Reuters that Iran and Oman have been working on finalizing details of an agreement to control the Strait, following reports that the two countries had agreed on how to share the waterway's revenues. However, concerns over shortages in the oil market persist, as warned by Daniel Hynes, senior commodity strategist at ANZ.

Qatar's prime minister will head to Iran on Thursday to relaunch diplomatic talks and end the nearly six-month-old conflict. The U.S. has halted its attacks on Iran for about a month but is seeking to impose greater economic pressure, which has raised investors' expectations for an easing of Gulf supply disruptions.