U.S. President Donald Trump said on Tuesday that there is a 'good chance' of progress in negotiations with Iran, as talks continue over transit fees and management of the Strait of Hormuz. The comments came amid a reported pause in hostilities between the two countries, with oil markets reacting sharply to the positive signals.
Negotiators are attempting to break a deadlock over the strategic waterway, through which about a fifth of global oil passes. Trump's remarks were described as indicating 'deep talks' are underway, according to reports. The diplomatic push has helped ease concerns about supply disruptions.
Brent crude and West Texas Intermediate front-month contracts both declined further in trading on Tuesday, extending recent losses. The drop reflects investor optimism that a resolution could reduce tensions in the Middle East and stabilize oil flows.
Analysts noted that any breakthrough in the Iran talks would likely lead to increased oil supply and lower prices. However, details of the negotiations remain scarce, and no formal agreement has been announced. The U.S. and Iran have been locked in a long-running dispute over the Strait of Hormuz, with Iran previously threatening to block the passage in response to sanctions.
The latest developments mark a potential shift after months of heightened rhetoric. Both sides have signalled willingness to find a diplomatic solution, though key differences persist. Markets will continue to watch for further statements from Washington and Tehran.