Global oil prices fell sharply on Tuesday as Brent crude dropped below $80 per barrel following signs of progress in negotiations aimed at restoring commercial shipping through the Strait of Hormuz.
The decline came after senior United States officials indicated that discussions with Iran were advancing, raising expectations that shipping through the strategic waterway could resume soon.
US Secretary of State Marco Rubio said negotiations had made progress but noted that a final agreement had yet to be reached. Treasury Secretary Scott Bessent also expressed optimism that a deal could be concluded within days, paving the way for the free movement of commercial vessels through the strait.
Following the remarks, Brent crude fell by nearly five per cent to around $79 per barrel, while US benchmark West Texas Intermediate (WTI) declined by more than five per cent to about $76 per barrel. Both benchmarks reached their lowest levels since mid-July.
The Strait of Hormuz is one of the world’s most important energy routes, handling about one-fifth of global oil and liquefied natural gas shipments before disruptions linked to the conflict that began in late February.
The disruption has contributed to higher fuel prices across several countries, although the latest decline in crude prices is expected to ease pressure on energy markets if shipping resumes.
In the United Kingdom, petrol prices have returned to levels seen before the conflict, averaging about £1.60 per litre. In the United States, petrol prices remain above $4 per gallon, while diesel is close to $5.40 per gallon.
In Nigeria, the average retail price of petrol stands at about N1,260 per litre, according to market surveys.
Although optimism has grown, the details of any potential agreement between Washington and Tehran have not been disclosed. Iran has continued to deny holding direct negotiations with the United States, insisting its discussions are taking place with Oman.
Qatar, one of the mediators in the dispute, said efforts to achieve a diplomatic resolution were ongoing, even though no direct talks are currently scheduled.
Meanwhile, the fall in oil prices also lifted investor sentiment on Wall Street, with major US stock markets gaining on expectations of lower energy costs and stronger corporate earnings.
