Oil Prices Plunge Over 6% as Iran Peace Deal Hopes Fuel Selloff

Crude oil prices posted steep losses Tuesday, with West Texas Intermediate (WTI) plunging 6.16% to settle at $75.39 per barrel, according to live price data. The selloff was driven by market speculation that a U.S.-Iran agreement to reopen the strategic Strait of Hormuz could be imminent.

Brent crude fell 5.87% to $78.85 per barrel, while the Bakken crude differential widened to a discount of $3.42 versus WTI. Natural gas prices also dropped, falling $0.10 to $2.68 per MMBtu.

The price collapse follows heightened rhetoric from U.S. officials. Treasury Secretary Scott Bessent suggested a deal could come Tuesday or Wednesday, while President Donald Trump called an agreement to reopen the strait and denuclearize Iran "imminent," according to OilPrice.com. However, Iran has denied holding direct talks with Washington, saying negotiations are occurring through mediators in Oman.

The potential for a deal has overshadowed bearish U.S. inventory data. The American Petroleum Institute estimated crude inventories rose by 2.69 million barrels for the week ending July 30, contrary to analyst expectations for a draw, OilPrice.com reported. Cushing, Oklahoma, storage hub inventories also rose by 2.358 million barrels. U.S. production for the week ending July 24 was nearly flat at 13.796 million barrels per day.

Before the conflict, roughly one-fifth of global oil and gas supply moved through the Strait of Hormuz. Persian Gulf producers have been forced to slash output since fighting began in February, with Saudi Aramco estimating the world has lost more than 2.6 billion barrels, according to OilPrice.com. A peace deal could quickly restore those flows, increasing global supply and pressuring prices.

For Bakken operators, the sharp drop in WTI prices, coupled with a wider local differential, directly reduces the netback price received for each barrel produced. The rapid $5 per barrel drop erodes cash margins and could impact drilling budgets if sustained. The market's sensitivity to geopolitical headlines underscores the ongoing volatility facing producers in North Dakota.

Despite the crude selloff, refined product markets show tighter fundamentals. Gasoline inventories remain 6% below the five-year average, while distillate stocks are 9% below average, OilPrice.com reported. This tightness supports refinery margins but also contributes to consumer pain at the pump. Patrick De Haan, Head of Petroleum Analysis at GasBuddy, warned that by later this week, the national average gasoline price could reach its highest level ever recorded for this point in the calendar year, according to a Rigzone summary.