Oil prices turn lower as Bessent says U.S. may have Iran deal "today or tomorrow"

Oil prices slumped on Tuesday, erasing earlier gains, following a string of potentially positive headlines on Middle East peace talks.

As of 07:45 ET, Brent crude futures, the global oil benchmark, had ticked down by 1.8% to $82.23 per barrel, after having gained more than 2.5% previously during the session. U.S. West Texas Intermediate (WTI) crude futures dropped 2.6% to $78.24 per barrel.

U.S. Treasury Secretary Scott Bessent told CNBC that he believed the U.S. and Iran were nearing an agreement, noting that "there is a chance we may have a deal today or tomorrow" to open the Strait of Hormuz and "move towards a more normalized position in this conflict."

Elsewhere, Qatar said a push to forge a diplomatic resolution to the Iran war is ongoing, with the efforts focused on de-escalation and the reopening of the Strait of Hormuz, according to media reports.   

The Gulf country, which has served as a regional mediator between Iran and the U.S., reportedly added that language on a possible deal has been drafted and is being circulated among negotiators. While there is currently no agreement to hold direct talks, a short-term resolution is the focus for Qatar, the reports said.

Investors have been assessing conflicting signals from the U.S. and Iran on negotiations over the reopening of the Strait of Hormuz, which revived concerns over persistent crude supply disruptions in the Middle East.

U.S. President Donald Trump on Monday said discussions with Iran were underway, warning that Tehran faced its "last chance" to reach a deal.

However, Iranian foreign ministry spokesperson Esmaeil Baqaei said the country was not currently in negotiations with the U.S. and was instead working with Oman on a route for vessel traffic through the Strait of Hormuz. The narrow waterway is vital conduit for roughly a fifth of the world’s oil and liquefied natural gas, making it a key flashpoint in the prolonged fighting between Washington and Tehran.  

The statements left the status of their on-again, off-again conflict murky. This, in turn, has threatened to dampen hopes for a diplomatic breakthrough, which were temporarily bolstered after Trump called off planned U.S. strikes on Iran over the weekend. 

"We’ve been in this situation multiple times before, only to see things unravel," ING analysts said in a note. "And with Iran denying that any talks are underway and Trump issuing warnings if no deal materialises, the backdrop clearly leaves ample room for a renewed escalation."

Meanwhile, data released on Monday showed that U.S. crude exports fell to 3.66 million barrels per day in July, the lowest level in eight months, as increased Middle Eastern supply following June’s short-lived ceasefire reduced demand for American crude.