Oil Prices Slide on Hopes for US-Iran Deal, Oman Proposes Strait Management
Oil prices continued to slide on Tuesday, reaching their lowest levels in over a week as hopes for a resolution to the U.S.-Iran conflict grew. Brent crude futures dropped by $1.75 or 1.98% to $86.61, while U.S. West Texas Intermediate crude fell by $1.26 or 1.53% to $81.35 per barrel.
The decline in oil prices comes as U.S. President Donald Trump said that Washington was having 'good talks' with Iran and that there was a chance of a resolution. However, he also warned that U.S. strikes would resume if negotiations failed, while Iran issued similar comments about retaliation.
Analysts point to the proposal by Oman for a joint regional mechanism to manage the Strait of Hormuz as a reason for optimism. The Strait handles around 20% of global oil consumption and is one of the world's most important oil shipping chokepoints.