Oil prices plummeted 5% to two-week lows on Monday amid hopes of a peace deal between the US and Iran to reopen the Strait of Hormuz, despite both sides downplaying the possibility. Brent oil prices down 4.8% to $98.57 a barrel at 11:19 a.m.

Iran’s top negotiator and foreign minister met with Qatar’s prime minister in Doha to discuss a possible U.S.-Iran deal to end the three-month-old war, an official said Monday.

Both parties claimed progress on a memorandum of understanding, halting the hostilities and allowing 60 days for negotiations to establish a definitive agreement.Get Oil Moving” Although not yet completed, there is potential for oil movement via the Strait of Hormuz, according to Price Futures Group senior analyst Phil Flynn.

In a lengthy Truth Social post on Monday, President Donald Trump said discussions with Iran were going “nicely,” but threatened more assaults if they failed.
He called for additional Arab and Muslim states to join the Abraham Accords, which aim to normalize relations between Israel and Muslim-majority states, brokered during Trump’s first term.If Iran makes a deal and gives up its nuclear stuff, the Middle East risk premium might drop significantly “Flynn added.

On Monday, Iran’s foreign ministry spokesperson Esmaeil Baghaei stated Iran was negotiating a war end and not nuclear problems.

Analysts anticipate a months-long restore to regular oil flows through the strait, even with a peace settlement, while destroyed oil and gas installations are restored.The supply shortfall of 10-11 million barrels per day of crude oil will persist until Middle Eastern production resumes, which could take months. The key factor for the oil market is physical oil flows, which are currently restricted through the strait.