Oil prices fell sharply on Tuesday after a senior US official expressed confidence that an agreement to reopen the Strait of Hormuz would be finalized "today or tomorrow." The comment, made in Dubai, signaled a potential end to the shipping disruptions that have plagued the vital energy corridor for weeks.
Brent crude and WTI futures retreated as traders priced in the prospect of restored flow through the chokepoint.
The market reaction reflects a rapid unwinding of the risk premium that has supported higher energy valuations since tensions escalated in late June.
Investors are now weighing the likelihood of a swift diplomatic resolution against the persistent threat of sporadic attacks in the region.
The optimism comes despite a recent attack on a cargo ship in the strait, underscoring the fragile nature of the current standoff.
A senior Iranian official previously confirmed that a draft agreement includes the immediate reopening of the waterway and a temporary lifting of oil sanctions against Tehran.