Oil prices fell sharply after U.S. Treasury Secretary Scott Bessent said Washington and Tehran could strike a deal as early as Tuesday or Wednesday to restore "freedom of movement" through the Strait of Hormuz, easing concerns over disruptions to one of the world's busiest oil shipping lanes.
Speaking to CNBC's Squawk Box, Bessent said negotiations with Iran were progressing and an agreement could be reached within days.
"We are in talks with the Iranians. There is a chance we may have a deal today or tomorrow to open the strait and move towards a more normalized position in this conflict," Bessent said.
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U.S. crude oil futures fell nearly 4%, slipping below $77 a barrel after Bessent signalled a potential breakthrough in talks over the Strait of Hormuz. This was the first time since July when the prices slipped below the $80-mark. The benchmark Brent, however, continued to hover slightly above $80 at the time of publishing this report.
Bessent, asked whether Iran would be permitted to levy tolls on commercial vessels using the strategic waterway, said the arrangement would ensure unrestricted passage.
"It would be freedom of movement," he said. "Even though things are still a little dicey there over the past few days, we saw quite a few ships coming out even now."
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The remarks weighed on crude prices, with U.S. West Texas Intermediate (WTI) futures falling about 4% to trade below $77 a barrel as investors priced in the possibility of reduced geopolitical risk.
The Strait of Hormuz is a critical transit route for global oil exports, and any signs of de-escalation in the region are closely watched by energy markets.
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