Oil Drops 5% After Trump Says US-Iran Deal Could Reopen Hormuz

Brent crude fell more than 5% on Wednesday after President Trump said a US‑Iran agreement could arrive before his trip to China, reducing immediate fears that the Strait of Hormuz would remain closed. Spot Brent traded near $105.45 a barrel as markets priced in a potential reopening of Gulf shipping lanes.

Trump told PBS that a deal could require Iran to surrender enriched uranium and pause parts of its nuclear program. He also halted Project Freedom, the US‑led escort operation that had been protecting ships transiting the strait, and warned that strikes would resume at a higher level if talks collapsed.

Iran’s Revolutionary Guard Navy ordered vessels to seek prior approval before transit and said unauthorized ships could be targeted. The IRGC Navy Command wrote, “With aggressor’s threats neutralized & new protocols in place, safe, stable passage through SOH will be ensured.”

About 1,500 vessels remain stranded near the strait, which carries roughly 20% of seaborne oil trade. That backlog keeps short‑term logistical pressure on supplies even as diplomatic signals reduced the immediate risk premium in oil prices.

Energy consultancy Rystad Energy cautioned that a political breakthrough would not instantly restore normal flows. Rystad estimated it would take six to eight weeks to reposition global tanker networks and another two to five weeks for insurers and shipowners to reprice and resume routine Gulf transits. The firm has cut its 2026 Brent forecast from $97 to $87 a barrel after an earlier ceasefire.

Rystad also estimated regional rebuild costs between $34 billion and $58 billion, with Iran and Qatar facing the largest repair bills. Some Gulf wells can be restarted quickly, but full recovery of pipelines, terminals and shipping routes could extend into the third quarter.

Market mechanics tied to the conflict remain in place: tanker freight rates are elevated, buyers of sour crude continue to pay security premiums, and insurers are still adjusting Gulf transit risk. US retail gasoline prices have stayed near $4.50 a gallon, and signs of demand erosion are appearing in consumption data.

Traders and shipping companies are watching whether Tehran accepts the reported framework before Trump departs for China. Even if an agreement is agreed, clearing backlogs, repairing damage and restoring normal commercial flows are expected to take several weeks.