[New York = E-Daily Seong Joowon Correspondent] International oil prices plummeted by more than 5% amid signs that negotiations between the U.S. and Iran to reopen the Strait of Hormuz are imminent.

According to CNBC on the 4th (local time), as of 3:05 p.m. that day, the international benchmark Brent crude was trading at $79.40 per barrel on the New York Mercantile Exchange, down 5.2%, while West Texas Intermediate (WTI) crude was trading at $75.80, down 5.6%.
Remarks by U.S. Treasury Secretary Scott Bessent triggered the sharp drop in oil prices. Appearing on CNBC’s “Squawk Box” that day, Secretary Bessent said, “We are in negotiations with Iran,” adding, “There is a possibility that we could reach an agreement today or tomorrow to open the Strait of Hormuz and move toward a more normalized situation in this dispute.” When asked whether Iran would impose a toll, he replied, “There will be free passage.”
However, U.S. Secretary of State Marco Rubio struck a different tone. According to Reuters, Secretary Rubio stated that day that progress had been made in negotiations with Iran and Oman to expand shipping traffic through the Strait of Hormuz, but he drew a line, noting that a final agreement had not yet been reached. Majed Al-Ansari, a spokesperson for the Qatari Ministry of Foreign Affairs, also reported that efforts toward a diplomatic solution are continuing.
According to Bloomberg, Iran is considering a plan to allow European nations to clear mines from the Strait of Hormuz. The mines have been cited as one of the biggest obstacles to normalizing traffic through the strait. U.S. President Donald Trump announced last weekend that he had called off plans for a large-scale attack on Iran to allow room for negotiations regarding the Strait of Hormuz. The U.S. and Iran had also signed an agreement to reopen the strait on June 17, but it fell through almost immediately.
Some observers view the likelihood of an agreement this time as low. Ryan McKay, Director of Commodity Strategy at TD Securities, told CNBC, “Iran is highly unlikely to agree to any deal unless it secures control over the Strait,” adding, “I believe there is a very high probability that a potential agreement will fall through at this point.” In fact, on the 3rd, a cargo ship was struck by an unidentified projectile approximately 20 nautical miles (about 37 kilometers) northeast of Al-Qasab, Oman.
The stock market is showing strength as falling oil prices coincide with positive earnings reports. According to The Wall Street Journal (WSJ), the Nasdaq, the S&P 500, and the Dow Jones Industrial Average are all up by around 2% today, buoyed by strong earnings from Palantir and Caterpillar. The WSJ reported that international oil majors such as Saudi Aramco and BP also benefited from the rise in international oil prices. The market is also keeping a close eye on SpaceX’s first-quarter earnings, which are set to be announced after the market closes.
On the supply side, the recovery in oil production also put downward pressure on oil prices. According to a Bloomberg survey, the Organization of the Petroleum Exporting Countries (OPEC)’s crude oil production in July averaged 19.44 million barrels per day, an increase of 1.16 million barrels per day. Three Persian Gulf countries—Kuwait, Saudi Arabia, and Iraq—accounted for most of the increase. Iraq saw the largest increase within OPEC, with production rising by 460,000 barrels per day to 2.3 million barrels, and its exports surged 37% in July, driven by increased shipments from the Port of Basra. However, Bloomberg noted that despite this increase, OPEC’s production still falls significantly short of pre-war levels.
Goldman Sachs projected that Brent crude would trade within a range of $80 to $90 per barrel until a new U.S.-Iran agreement is confirmed or attacks escalate significantly.