Crude oil fell hard on Tuesday. WTI dropped 6.6% to $75.39 a barrel and Brent slid 6.1% to $78.93, as traders bet that Washington and Tehran are close to a deal that would reopen the Strait of Hormuz and let Gulf oil move freely again.
The sell-off drained what was left of the war premium that has hung over the market for months. Brent is down roughly 10% since last week, and WTI has shed more than $11 from its late-July peak near $87. A week ago, a pause in the fighting had already pulled Brent below $82. This is a deeper leg down, and it is driven by the prospect of a real agreement rather than another short lull.
| Benchmark | Price | Day |
|---|---|---|
| WTI crude | $75.39 | -6.6% |
| Brent crude | $78.93 | -6.1% |
| Natural gas | $2.68 | -3.7% |
What triggered the drop
The spark came from Washington. US Treasury Secretary Scott Bessent told reporters that an agreement to open the strait could be reached within a day or two. Qatar has floated a de-escalation plan to both sides, and President Trump held off on further strikes, warning Iran it had one last chance to settle.
Nothing is signed yet. Iran still insists it should decide which ships pass through Hormuz, and that single demand could unravel the talks. For a market that has spent months bracing for the worst, though, the mere chance of a deal was enough to send sellers for the exits.
Barrels are already moving
Diplomacy was not the only thing pressing on prices. Oil is finding routes around the chokepoint. Turkey and Iraq extended a pipeline deal that carries northern Iraqi crude to the Mediterranean, and Kazakhstan restarted shipments through the Caspian Pipeline Consortium after a short halt.
Supply is climbing from the OPEC side as well. Seven members, led by Saudi Arabia and Russia, agreed on Sunday to lift output by another 188,000 barrels a day in September. It is the latest in a run of monthly increases that finishes unwinding the voluntary cuts the group first made in 2023.
What to watch next
Everything now turns on the talks. A signed deal to reopen Hormuz would likely drag prices lower still, especially with fresh OPEC+ barrels on the way and global inventories building. If the negotiations fall apart and the strikes resume, the premium traders just stripped out could come back in a hurry.
Natural gas is holding up better than crude for now. The US benchmark traded at $2.68 per million British thermal units, off a milder 3.7% on the day, as strong export demand cushions the drop.