WTI Oil drops sharply after Bessent signals an imminent Iran deal

West Texas Intermediate (WTI) Oil prices plummeted sharply on Tuesday, trading near $75.70 per barrel, marking a 3.91% decline for the day and the lowest level in a week. Tensions between the United States and Iran subsided, potentially leading to the reopening of the Strait of Hormuz. US Treasury Secretary Scott Bessent disclosed in a CNBC interview that ongoing discussions with Iran are underway, with the possibility of a deal being reached as early as Tuesday or Wednesday.

This could result in a normalization of relations and a downward adjustment in energy prices. Qatar's Foreign Ministry spokesperson, Majed Al Ansari, affirmed that diplomatic efforts between the US and Iran persist, with Qatar, Pakistan, and Oman actively coordinating to facilitate negotiations. A senior official also hinted at an imminent announcement regarding the reopening of the Strait of Hormuz, although no official confirmation has been issued yet.

The improving geopolitical climate is alleviating concerns over potential global oil supply disruptions, contributing to the sharp drop in crude prices. WTI Oil, currently trading around $75.72, continues to exhibit a bearish short-term trend, trading below the 100-period and 200-period simple moving averages. The Relative Strength Index (RSI) near 35 suggests potential for a corrective bounce, but the downside bias is expected to persist as long as the price stays beneath the $77.40 level.