Oil Prices Slide Amid Hopes of Short-Term Deal Between US, Iran

Oil prices declined for the third consecutive session on August 5 as investors reacted to hopes of a short-term agreement between the US and Iran to end their conflict and reopen the Strait of Hormuz to commercial shipping.

Brent crude futures fell $1.1, or 1.34%, to trade at $78.30 a barrel, while U.S. West Texas Intermediate crude declined $1.43, or 2%, to $74 a barrel.

Qatar is serving as a key mediator in the negotiations between Iran and Oman, with US Treasury Secretary Scott Bessent stating that Washington and Tehran could reach an agreement to reopen the Strait of Hormuz as early as Tuesday or Wednesday.

An agreement would allow commercial vessels to move freely through the waterway, which carries nearly 20% of the world's oil and liquefied natural gas.

Goldman Sachs has cautioned that Brent crude prices could rise to $120 a barrel if disruptions to shipping through the Strait of Hormuz continue, but expects tensions in the Middle East to eventually ease, leading to an average price of $80 a barrel in the fourth quarter.