Oil prices fall below $100 a barrel on hopes of Iran peace deal

Oil prices fell below $100 a barrel, with Brent crude futures dropping 6% to $97.28, due to hopes of a peace deal between the US and Iran. Stock markets also rose on this prospect. While a framework has been negotiated, disagreements persist over key issues like Iran's blockade of the Strait of Hormuz, with an Iranian spokesperson stating an agreement is not imminent. Analysts remain cautious about overreacting, noting that even if the strait reopens, a return to normal oil flows will take months. The potential reopening of the strait has led to a rally in Treasury bond futures, gold, and equities, as investors price out inflation fears and hawkish rate hike expectations.

Oil prices have fallen due to tentative hopes for a deal to end the US-Israel war on Iran. Brent crude dropped about 5% on Sunday as US President Donald Trump provided mixed signals regarding a permanent end to the conflict. Trump stated negotiations with Tehran were proceeding constructively but cautioned against rushing a deal, emphasizing the need to "get it right." This follows his earlier announcement that a deal had been largely negotiated, including the reopening of the Strait of Hormuz. In response to these developments, Japan's Nikkei 225 stock index surged to an all-time high. Analysts note that the market anticipates a significant flow of oil once the Strait of Hormuz reopens.