Oil prices dropped to a three-week low on Tuesday after senior US officials suggested a deal with Iran could soon reopen the Strait of Hormuz, a key shipping route for global oil and gas supplies. The prospect of eased disruption matters because previous rounds of talks have repeatedly stalled, leaving oil markets volatile and contributing to higher fuel prices for motorists.

Brent crude fell by nearly 5% to under $80 a barrel, while US West Texas Intermediate dropped more than 5% to $76, with both benchmarks hitting their lowest levels since 13 July. Secretary of State Marco Rubio said talks with Iran and Oman had made progress but were not yet finalised, while Treasury Secretary Scott Bessent suggested a deal could be reached within days. No details of a potential agreement have been released, though before the conflict began in late February the strait handled roughly a fifth of the world's daily oil and liquefied natural gas supplies.