Global oil prices declined on Monday after fresh signs emerged that the United States and Iran could be edging closer to a deal aimed at easing tensions in the Middle East.
The drop followed remarks by US Secretary of State Marco Rubio, who said negotiators had made progress and could reach an agreement soon.
Speaking during a visit to India, Rubio described the discussions as “a pretty solid thing on the table” but noted that talks were still ongoing.
“We’re still a work in progress,” Rubio said in a statement from New Delhi. “But we continue to hope we will get an answer from the Iranians soon.”
According to US press reports, the possible deal might involve a two-month extension of the ceasefire, the opening of the Strait of Hormuz and additional discussions on the subject of Iran’s nuclear program.
The Strait of Hormuz is one of the main shipping lanes for transporting oil in the world, carrying roughly one-fifth of all international oil and liquefied natural gas supplies. The increasing tensions in the region have been a source of fear that there could potentially be interruptions in oil supplies, driving prices up on the international market.
Asian markets have also shown positive changes as a result of the reports on the possible deal, gaining shares because of the expectations for reduced tensions in the Gulf.
Tensions escalated when the US and Israel launched strikes against Iran on February 28. In retaliation, Iran carried out attacks in the region which led to the blocking of the Strait of Hormuz, affecting global oil markets.
Iran decided to block the Strait of Hormuz, causing disturbances in world oil prices and fears about global commerce.
It is reported that although the proposed agreement will not solve all problems at once, it will provide an opportunity for further talks over sanctions and frozen Iranian money, as well as Tehran’s nuclear program.
According to the foreign ministry spokesman Esmail Baghaei of Iran, both sides have come to the point of being “very close and very far from agreement”.
Meanwhile, US president Donald Trump has been asserting that talks continue, adding that he told American negotiators not to make haste.
There are different opinions about talks in the United States, since some Republicans believe that the proposal might be favorable to Iran.
However, Trump has justified the talks by asserting that any agreement made will stop Iran from manufacturing nuclear arms.
The events have aroused keen interest worldwide because of their impact on oil prices, inflation and international trade.
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