Oil Futures Fall on Possible Deal To Reopen Hormuz

1523 ET – Crude futures fall to a three-week low after Treasury Secretary Scott Bessent said the U.S. could be close to an agreement with .css-qxhvg8-OverridedLink.css-qxhvg8-OverridedLink:any-link{-webkit-text-decoration:none;text-decoration:none;color:var(--color-interactiveLink010, interactiveLink010);border-bottom:1px solid;border-bottom-color:var(--color-interactiveLink010, interactiveLink010);}@media (prefers-color-scheme: dark){.page_supports_browser_dark_mode .css-qxhvg8-OverridedLink.css-qxhvg8-OverridedLink:any-link{color:var(--interactive-text-color);border-bottom-color:var(--interactive-text-color);}.page_supports_browser_dark_mode .css-qxhvg8-OverridedLink.css-qxhvg8-OverridedLink:any-link.page_supports_browser_dark_mode .css-qxhvg8-OverridedLink.css-qxhvg8-OverridedLink:any-link svg{fill:var(--interactive-text-color);}}.css-qxhvg8-OverridedLink.css-qxhvg8-OverridedLink:any-link.css-qxhvg8-OverridedLink.css-qxhvg8-OverridedLink:any-link 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.css-i0lbhy-OverridedLink.css-i0lbhy-OverridedLink:any-link{color:var(--interactive-text-color);border-bottom-color:var(--interactive-text-color);}.page_supports_browser_dark_mode .css-i0lbhy-OverridedLink.css-i0lbhy-OverridedLink:any-link.page_supports_browser_dark_mode .css-i0lbhy-OverridedLink.css-i0lbhy-OverridedLink:any-link svg{fill:var(--interactive-text-color);}}.css-i0lbhy-OverridedLink.css-i0lbhy-OverridedLink:any-link.css-i0lbhy-OverridedLink.css-i0lbhy-OverridedLink:any-link svg{fill:var(--color-interactiveLink010, interactiveLink010);}.css-i0lbhy-OverridedLink.css-i0lbhy-OverridedLink:any-link:hover{-webkit-text-decoration:none;text-decoration:none;color:var(--color-interactiveLink020, interactiveLink020);border-bottom:1px solid;border-bottom-color:var(--color-interactiveLink020, interactiveLink020);}@media (prefers-color-scheme: dark){.page_supports_browser_dark_mode .css-i0lbhy-OverridedLink.css-i0lbhy-OverridedLink:any-link:hover{color:var(--interactive-text-color);border-bottom-color:var(--interactive-text-color);}.page_supports_browser_dark_mode .css-i0lbhy-OverridedLink.css-i0lbhy-OverridedLink:any-link:hover.page_supports_browser_dark_mode .css-i0lbhy-OverridedLink.css-i0lbhy-OverridedLink:any-link:hover svg{fill:var(--interactive-text-color);}}.css-i0lbhy-OverridedLink.css-i0lbhy-OverridedLink:any-link:hover.css-i0lbhy-OverridedLink.css-i0lbhy-OverridedLink:any-link:hover svg{fill:var(--color-interactiveLink020, interactiveLink020);}Iran to reopen the Strait of Hormuz, while Qatar reported progress in diplomatic efforts. “Today’s negotiations are dealing solely with opening the Strait of Hormuz and getting barrels of oil moving from the Persian Gulf as fast as possible,” Robert Yawger of Mizuho says in a note. “I still expect a bad deal to ultimately get done, which will allow the U.S. to declare some kind of victory, but leave a lot of loose ends, including the nuclear deal.”WTI settles down 5.7% at $75.77 a barrel, and Brent falls 5.3% to $79.36—their lowest closes since July 10. (anthony.harrup@wsj.com)

1115 ET – Oil futures move further into the red after U.S. Treasury Secretary Scott Bessent says on CNBC that an agreement with Iran may be reached by Wednesday, and Qatari officials say progress has been made. “Bessent is what probably pushed prices down, but more recently catalyzed by Qatar confirming that,” says Ajay Parmar of energy intelligence firm ICIS. The key thing Iran wants is some form of repayment to cover costs incurred during the war, and they will likely end up pushing for a toll system for the Strait of Hormuz. “From my perspective this is inevitable, because it will be a way out for the U.S.,” Parmar says. “I suspect a reasonable tolling system is going to be the negotiated outcome.” WTI is down 4.2% at $76.96 a barrel and Brent is off 3.7% at $80.68.(anthony.harrup@wsj.com)