Global oil prices recorded a significant downturn on Tuesday, as fresh diplomatic engagements between the United States and Iran eased fears of extended supply disruptions across the Middle East.
Brent crude, the international benchmark, slipped below $84 per barrel, marking a sharp retreat from its position above $100 recorded just last week.
According to data from Oilprice.com, Brent declined from approximately $87 per barrel on Monday to roughly $83.92 by Tuesday’s close.
Similarly, the United States benchmark, West Texas Intermediate (WTI), fell to about $79 per barrel, mirroring the easing geopolitical tensions.
The latest price drop came as diplomatic efforts between Washington and Tehran gained momentum, reducing concerns over a prolonged closure of the Strait of Hormuz.
The Strait of Hormuz, a vital global oil shipping route, facilitates the passage of approximately one-fifth of the world’s crude supply.
Oil prices had surged earlier after the United States launched strikes on Iran on February 28, aimed at preventing Tehran from acquiring a nuclear weapon.
The subsequent exchange of attacks disrupted maritime shipping in the Gulf region and led to the closure of the strategic waterway, triggering widespread fears of a major energy supply shock.
The Strait of Hormuz was temporarily reopened last month when both nations agreed to a ceasefire, offering brief respite to global energy markets.
However, the waterway was reclosed recently as the two countries resumed exchanging strikes, reigniting supply concerns.
Fresh developments on Tuesday, however, signaled potential progress toward reopening the vital shipping lane.
Reuters reported that Iran had proposed to Oman a temporary arrangement to reopen the Strait of Hormuz.
Under Iran’s proposal, one direction of maritime traffic would pass through Iranian waters, while part of the opposite route would also transit Iranian territory.
Iran’s Deputy Foreign Minister, Kazem Gharibabadi, told state television that Tehran had rejected Oman’s proposal for an equal division of transit routes.
Gharibabadi argued that Oman’s proposal failed to address Iran’s security concerns pending the achievement of long-term regional stability.
He warned that the Strait of Hormuz would remain closed if Muscat rejected Iran’s proposal, adding that Iran had never recognized the southern shipping route along Oman’s coast.
The prospect of renewed oil flows through the strategic waterway helped calm global markets, reversing part of last week’s sharp rally.
1Meanwhile, United States President Donald Trump stated that negotiations with Iran were progressing well, though he cautioned that Washington remained prepared to resume military action if diplomacy faltered.
1In an interview with Fox News on Tuesday, Trump expressed a preference for avoiding further strikes but threatened to target Iran’s key infrastructure, including power plants, bridges, and the underground “Kolang Mountain” nuclear facility, if no agreement was reached.
“I could knock out all their power plants in one day. About 91 million people would be left without electricity and without bridges. But if I can avoid doing that, I’d prefer for it not to happen,” Trump was quoted as saying.
Trump also claimed that most of Iran’s major bridges could be destroyed “in under two hours,” emphasizing that Iranian officials understood the consequences of a diplomatic breakdown.
Ahead of a meeting with Israeli Prime Minister Benjamin Netanyahu at the White House, Trump dismissed suggestions that he required Israeli intelligence regarding the “Kolang Mountain” facility, insisting that the US already possessed complete knowledge of the site.
He further claimed that previous American strikes had significantly degraded Iran’s nuclear programme, warning that the underground facility would also be targeted if negotiations ultimately failed.
