Oil prices fall 5% after Trump says Iran talks proceeding in a 'constructive manner'

Crude oil prices experienced a decline of over 4% on Sunday following President Donald Trump's announcement that negotiations with Iran regarding the reopening of the Strait of Hormuz are progressing. However, he emphasized that the U.S. would not rush into finalizing a deal.

As of 7:13 p.m. ET, West Texas Intermediate futures fell approximately 5%, settling at $91.65 per barrel. Correspondingly, Brent crude futures also decreased by around 5%, reaching $98.30 per barrel.

"The negotiations are proceeding in an orderly and constructive manner, and I have instructed my representatives not to rush into a deal as time is on our side," Trump stated in a social media post on Sunday.

The president had indicated on Saturday that an agreement concerning Hormuz and other related matters was largely negotiated and would soon be announced. Trump has previously suggested that the situation with Iran was nearing resolution, only for tensions to escalate again, causing a subsequent surge in oil prices.

Last week, U.S. crude oil prices plummeted over 8%, while Brent experienced a decline of more than 5% after Trump disclosed that he postponed imminent airstrikes against Iran to allow more time for negotiations. Since the U.S. and Israel launched airstrikes against Iran on February 28, oil prices have risen more than 30%.

Iran has effectively imposed a blockade on shipping through Hormuz since early March, mandating that vessels obtain its permission to pass, or risk being attacked. This blockade followed U.S. and Israeli airstrikes that resulted in the death of the Islamic Republic's leader, Ayatollah Ali Khamenei, along with other key officials.

The Strait of Hormuz stands as a crucial chokepoint for the global oil market, with roughly 20% of the world’s oil supply transiting through this strategic route prior to the conflict. The blockade initiated by Iran has significantly curtailed oil exports from the Middle East, leading to unprecedented supply disruptions.

In response, the U.S. has implemented a blockade against Iran's ports and vessels. Trump reiterated on Sunday that the U.S. blockade would remain in "full force and effect until an agreement is reached, certified, and signed."