Oil prices dip below $100 per barrel despite Hormuz being closed for three months

Oil prices tumbled over 5% on Monday, falling below the $100 per barrel mark, buoyed by optimism over a potential agreement aimed at ending the US-Iran war. The market reaction came even as US President Donald Trump sought to cool expectations of an imminent breakthrough.At around 7:40 am, WTI Crude was trading at $92.41, down $4.19 or 4.34%, while Brent Crude stood at $99.49, slipping $4.05 or 3.91%. Meanwhile, disruptions around the Strait of Hormuz are nearing the three-month mark, keeping global energy markets on edge.Despite the upbeat market sentiment, Trump downplayed the likelihood of a near-term deal. In a social media post on Sunday, he said that he had “informed my representatives not to rush into a deal in that time is on our side”. He further added, “The Blockade will remain in full force and effect until an agreement is reached, certified and signed.”Earlier remarks from Trump had suggested progress in talks, noting that the deal “has been largely negotiated, subject to finalization between the United States of America, the Islamic Republic of Iran and the various other Countries.”A key unresolved issue between the two sides continues to be the Strait of Hormuz, a critical global shipping route that previously handled around one-fifth of the world’s oil and liquefied natural gas flows before the conflict disrupted supply lines.Iran’s Tasnim news agency reported that several key clauses of a possible agreement were still “unresolved at this time,” including the issue of frozen Iranian assets.Meanwhile, US Secretary of State Marco Rubio also told The New York Times that although regional backing for a deal was growing, a nuclear agreement could not be completed “in 72 hours on the back of a napkin”. He added that “seven or eight countries in the region” were supporting the approach and that Washington was ready to proceed.Rubio had earlier suggested that a deal could be finalised as early as Sunday, but expectations were again tempered by Trump, who said on social media, “If I make a deal with Iran, it will be a good and proper one” and added, “It isn't even fully negotiated yet.”Since the conflict began, oil prices have remained firmly above the $100 per barrel mark, compared to around $70 before the escalation. The sustained spike reflects persistent uncertainty in global energy markets amid ongoing geopolitical tensions.The crisis in the Middle East was triggered on February 28, when the US and Israel carried out joint strikes on Iran. In response, Tehran tightened controls over the strategic Strait of Hormuz, disrupting global energy flows and squeezing supplies worldwide. A ceasefire between the United States and Iran has been in place since April 8, with diplomatic efforts continuing towards a negotiated settlement. However, tensions remain elevated, as Iran maintains restrictions on Gulf shipping routes while Washington continues its blockade on Iranian ports.