Trump-Iran Talks Send Brent Down 5%

Brent crude plunged more than 5% to $105.45 after President Trump said a US-Iran agreement could lead to reopening the Strait of Hormuz. The president also paused Project Freedom, the U.S.-led operation escorting ships through the strait, prompting investors to price in a possible return of transit through the chokepoint.

Trump said a deal could require Iran to surrender enriched uranium and halt parts of its nuclear program and warned that strikes would resume at a higher level if talks collapse. He made the remarks publicly and on social media ahead of a planned trip to China.

Iran’s Islamic Revolutionary Guard Corps ordered vessels to request prior approval before transiting the Strait of Hormuz and warned that unauthorized ships could be targeted. The IRGC Navy Command wrote, “With aggressor’s threats neutralized & new protocols in place, safe, stable passage through SOH will be ensured.”

Markets reacted immediately. Spot Brent dropped more than 5% on the announcement. About 1,500 ships remain stranded near the strait, which carries roughly 20% of seaborne oil trade, and disrupted shipping patterns have kept tanker rates and security premiums elevated.

Rystad Energy cautioned that a diplomatic breakthrough alone would not restore normal flows. The consultancy said damaged infrastructure, higher freight costs and insurance repricing will slow the return of barrels to market. Rystad estimated that global tanker networks would require six to eight weeks to reposition and that insurers and shipowners would need an additional two to five weeks.

Rystad has cut its 2026 Brent forecast from $97 to $87 a barrel following an earlier ceasefire and put regional rebuild costs at $34 billion to $58 billion, with Iran and Qatar facing the largest bills. The firm said some wells can restart quickly, but repairs to pipelines, terminals and shipping arrangements are likely to take longer.

Consumers have already felt the supply strain. U.S. retail gasoline prices have remained near $4.50 a gallon during the conflict, and early signs of demand reduction have appeared in consumption data.

Markets are watching whether Tehran accepts the proposed framework before the U.S. president departs for China. Rystad said even with an agreement, normalization of flows is likely to be phased, with elevated costs and constrained physical supply persisting for weeks.