REUTERS

Oil prices fell about 5 percent to two-week lows yesterday as optimism grew that the United States and Iran were moving closer to a peace deal that would reopen the Strait of Hormuz, even though Washington and Tehran played down hopes for an imminent breakthrough.

Brent crude futures were down $4.97, or 4.8 percent, at $98.57 a barrel at 11:19am ​ET (1519 GMT) and US West Texas Intermediate futures were down $4.85, or 5 percent, at $91.75. Both contracts traded at their ​lowest since May 7.

Iran’s top negotiator and its foreign minister were in Doha for talks with Qatar’s prime minister on a potential deal with the US to end the three-month-old war, an official briefed on the visit ​said Monday.

Both sides said they have made progress on a memorandum of understanding that would halt the war and give negotiators ​60 days to reach a final deal.

“Even though it’s not done, there seems to be some hope that we will start to get some oil moving through the Strait of Hormuz,” said Phil Flynn, senior analyst with Price Futures Group.

In a lengthy Truth Social post ​yesterday, US President Donald Trump said talks with Iran were going “nicely,” but warned of fresh attacks if they failed.

He ​urged more Arab and Muslim states to sign up to the Abraham Accords, which were brokered during Trump’s first term in office and ‌aim to normalise ties between Arab and other Muslim-majority states and Israel.

“That could mean a significant reduction of risk premium in the Middle East, especially if a deal with Iran can be done and Iran gives up their nuclear material,” Flynn said.