Oil prices fall to two-week lows on hopes of US-Iran Hormuz deal

Oil prices fell to two-week lows and Asian stocks climbed on Monday over hopes a deal between the United States and Iran to open the Strait of Hormuz could be brokered.

Oil prices plummeted on optimism that the US and Iran were moving closer towards a peace deal even though they remained at odds over key issues, including blockades on the strait of Hormuz that continue to restrict oil supply from the Middle East.

Brent crude futures fell $4.71, or 4.55%, to $98.83 a barrel by 2234 GMT, while US West Texas Intermediate was at $92.03 a barrel, down $4.57, or 4.73%. Both contracts touched their lowest points since 7 May earlier in the session.

The United States and Iran appear closer than ever to a deal that would end the war that has ravaged the Middle East since late February, sending energy prices soaring and stoking global inflation.

But sticking points in their negotiations have tempered hopes of a swift resolution to restore the transit of oil and gas through the Strait of Hormuz.

US President Donald Trump said on Sunday he had informed US negotiators “not to rush into a deal”.

“The negotiations are proceeding in an orderly and constructive manner, and I have informed my representatives not to rush into a deal in that time is on our side,” a post to Trump’s official Truth Social account said.

Iran’s Tasnim news agency said based on their information key clauses of a possible agreement remained unresolved. One of the main sticking points has been whether Tehran is willing to hand over its stockpile of highly enriched uranium.

The release of Iran’s frozen assets held under longstanding US sanctions and whether Lebanon, repeatedly targeted by Israeli strikes, will be included in any peace deal are also key issues.

Markets across Asia climbed in early trade on hopes Washington and Tehran will be able to overcome these hurdles. Tokyo soared more than three percent in early trade on Monday, while Hong Kong and Seoul were closed for public holidays.

Shanghai inched upwards, with Taipei, Manila, Bangkok, Jakarta, Singapore, Sydney and Wellington also climbing.