Hormuz deal hopes jolt oil and stock markets

U.S. Treasury Secretary Scott Bessent said the United States is in talks with Iran and that there is a chance a deal to reopen the Strait of Hormuz could be announced "today or tomorrow." He described the potential agreement as a step toward a more normalized position in the conflict affecting the vital waterway. Bessent said any reopening would amount to "freedom of movement" for commercial ships passing through the strait.

Bessent highlighted that hundreds of ships are currently stuck in the Persian Gulf and suggested that once they are able to exit, there could be a "big relief trade". He said this would affect energy, fertilizer, refined products and industrial gases, signaling broad implications for global commodity flows if shipping conditions improve.

Oil prices dropped sharply following Bessent's comments and other diplomatic indications of progress. Front-month Brent futures fell about 4.7% intraday to around $79.8 a barrel, while U.S. WTI futures declined about 5.4% to around $76.0. Both benchmarks fell to their lowest levels since mid-July during the session.

In earlier trading, Brent crude was reported about 3% lower at $81.24 per barrel and WTI nearly 4% lower at $77.22 after Bessent's television appearance. Other market snapshots showed Brent dropping more than 4% below $80 a barrel, reversing previous gains as traders responded to rising hopes of an agreement on Hormuz.

Additional comments from Qatar and signals of a possible diplomatic resolution to improve oil flows through the strait added to the downward pressure on prices. Across multiple reports, intraday declines in the mid-single-digit percentage range were cited as markets quickly repriced the risk of prolonged disruptions.

Multiple outlets reported that Iran is negotiating with Oman on a temporary corridor or "intermediate" route through the Strait of Hormuz to allow commercial shipping to resume. Iranian descriptions include inbound routes running close to Iran's coast along with oversight arrangements. Tehran has denied engaging in direct talks with the United States while acknowledging discussions with Oman.

U.S. officials and other accounts have indicated that any temporary routes would not involve Iranian permissions or tolls. Separate reporting said Iranian and Omani negotiators had agreed on a temporary arrangement for shipping through the waterway, which contributed to further declines in Brent prices during the day.

While crude prices fell, equity markets moved higher on expectations that a reopening of Hormuz could ease energy and trade disruptions. U.S. equity futures rose sharply after Bessent's remarks about possible near-term progress with Iran. Major indices responded positively to the prospect of improved shipping flows.

The S&P 500 (SPX) briefly hit an intraday record as investors priced in a potential reduction in Gulf-related risks. Market coverage emphasized that moves in both oil and equities reflected reactions to the possibility of an agreement rather than to confirmed changes in shipping operations.