Brent crude fell 3.6% to $94.00 per barrel on Monday as Qatar’s prime minister headed to the White House with an Iranian proposal for an interim deal to reopen the Strait of Hormuz. WTI dropped 3% to $88.09, and U.S. natural gas rose 0.8% to $3.02/MMBtu as of 7:26 a.m. ET. The decline extends last week’s 16% slide in Brent, the benchmark’s steepest weekly fall since the start of the Covid-19 pandemic.
Iran has signed off on the Qatari-brokered terms, according to two diplomatic sources who spoke to Israeli media. Tehran would reopen Hormuz and halt attacks on Gulf tankers. Washington would lift its naval and economic blockade of Iran and release $8 billion in Iranian funds frozen in Qatar. Under the terms, Iran drops its demand to control the strait and charge transit fees but still refuses to put its nuclear program on the table. Neither government has confirmed the terms, and Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, Secretary of State Marco Rubio and Secretary of War Pete Hegseth reportedly oppose a deal along these lines.
Trump said on Sunday that renewed U.S. strikes on Iran are “highly unlikely” if negotiations produce a strong agreement. Rubio, speaking in Florida the same day, called Iran’s demands “outrageous and ridiculous” and said the two sides are not close to a breakthrough. Iranian Foreign Minister Abbas Araghchi said Iran’s offer to reopen Hormuz within two days stands, on condition that the war ends on all fronts.
Shipping through Hormuz came under fire again over the weekend, with Washington and Tehran both reporting attacks on vessels in or near the strait, and the Iran-aligned Houthis claimed a strike on Saudi Aramco’s offices in Riyadh on Sunday. Murban crude, the physical Gulf benchmark, climbed 3.4% to $99.17 in Asian trading. A similar U.S.-Iran memorandum reached in Switzerland in May collapsed after an Iranian attack on oil tankers in the strait.
By Charles Kennedy for Oilprice.com
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