U.S.-Iran deal to open Hormuz could come Tuesday or Wednesday: Bessent

Key Points:

• The U.S. and Iran are in talks to reach a deal as soon as Tuesday or Wednesday to reopen the Strait of Hormuz, allowing freedom of movement for commercial ships, according to U.S. Treasury Secretary Scott Bessent.
• The proposed agreement would permit ships to transit the strait without Iran charging tolls, aiming to normalize the conflict and ease tensions in the region.
• Following the announcement, U.S. crude oil futures dropped about 3%, with expectations that prices will fall further once hundreds of ships stuck in the Persian Gulf can move freely.
• The reopening of the strait is expected to relieve supply chain issues not only for energy but also for fertilizer, refined products, and industrial gases, potentially leading to a significant drop in prices.
• The deal follows a June 17 memorandum of understanding that briefly reopened the strait but collapsed due to disagreements over transit routes, with Iran insisting ships use its territorial waters and the U.S. opposing this condition.