International crude oil futures tumbled more than 5 percent on Tuesday after media reports suggested that the United States and Iran may soon reach an agreement concerning the Strait of Hormuz, easing fears of oil supply disruptions through the critical waterway.
The West Texas Intermediate for September delivery decreased by 4.57 U.S. dollars, or 5.69 percent, to settle at 75.77 dollars a barrel on the New York Mercantile Exchange.
Brent crude for October delivery dropped 4.41 dollars, or 5.26 percent, to settle at 79.36 dollars a barrel on the London ICE Futures Exchange.
Crude futures settle lower on hopes of U.S.-Iran deal over Strait of Hormuz
Iranian Foreign Ministry spokesman Esmaeil Baghaei said on Tuesday that ongoing talks between Iran and Oman were "positive" at both the technical and political levels, and were focused on designating safe routes for maritime passage through the Strait of Hormuz.
The negotiations are continuing, Baghaei told state-run IRIB TV, saying that Iran seeks to develop mechanisms with Oman to manage future shipping traffic through the strategic strait.
He said any new routes must safeguard the sovereign rights and national security of both Iran and Oman, adding that the final results will be announced after the talks' conclusion. Meanwhile, state-run Press TV on Tuesday cited a senior Iranian official as saying that once operational, the new corridor will replace the existing northern and southern routes.
The official described the measure as defensive and "fully consistent with the rights of any sovereign state to protect its territorial waters from external threats."
Iran tightened its grip on the strait on Feb 28, barring safe passage of vessels belonging to or affiliated with Israel and the United States following their joint strikes on Iranian territory.
The U.S. military launched multiple waves of strikes against Iranian targets last month, saying they were in response to Iranian attacks on vessels in the Strait of Hormuz and aimed at "degrading Iran's ability to threaten commercial shipping." Iran responded with missile and drone attacks targeting U.S. military bases and facilities in the region.
Iran says ongoing talks with Oman "positive," focused on creating safe routes in Strait of Hormuz
