Oil prices swing on US Iran deal hopes amid Strait of Hormuz risk

Oil prices experienced significant volatility this week as diplomatic statements from the United States and Iran alternately raised and dashed hopes for a resolution to the ongoing conflict and the reopening of the critical Strait of Hormuz. Prices fell sharply on Wednesday after U.S. President Donald Trump said negotiations to end the war were in their final stages, but they remained elevated overall due to persistent supply concerns.

President Trump stated on multiple occasions that the war would end very quickly, predicting a resulting sharp decline in global oil prices. He said Iran was eager to reach a deal and claimed an abundant global oil supply would cause prices to plummet. The president also revealed he had been close to ordering new military strikes on Iran but delayed after receiving appeals from regional allies who indicated serious negotiations were underway. He warned the U.S. was prepared to launch a full-scale assault if an acceptable deal is not reached, with a central condition being that Iran not obtain nuclear weapons.

In response, Iranian officials have expressed distrust and warned of severe consequences for further attacks. Iran’s Revolutionary Guards...