Oil prices have fallen on international markets after US President Donald Trump announced a halt to airstrikes on Iran and signaled that negotiations to reopen the Strait of Hormuz were progressing.
Brent crude, the international benchmark, fell about 5.6% to around $83 a barrel, while U.S. crude fell about 5.5% to near $80 a barrel.
The price drop came as markets reacted to the possibility of a diplomatic solution and easing tensions between the US and Iran.
The Strait of Hormuz remains the focal point of the crisis
The Strait of Hormuz is one of the world’s most important energy transport routes. Before the conflict, about 20 million barrels of oil passed through the area every day.
However, military tensions have restricted maritime traffic and increased uncertainty in global markets.
Although Trump has halted plans for new attacks on Iran, Tehran has not yet given clear signals that it will change its stance on the Strait of Hormuz.
An Iranian Foreign Ministry spokesman said that an understanding with Oman on an alternative sea route would not automatically mean the reopening of the strait.
Several ships have faced threats while attempting to pass through the Strait of Hormuz, while Iran’s Revolutionary Guard Corps has intervened against several naval vessels.
Meanwhile, Saudi Arabia has increased its use of alternative oil transport routes through the Bab al-Mandeb Strait. But even this area remains insecure due to attacks by Iran-backed Houthi rebels in Yemen.
Global markets are now waiting to see whether negotiations between Washington and Tehran will produce an agreement that will restore normal energy flows in the region.