For months, oil traders have been pricing in the possibility that the Strait of Hormuz stays closed. Every week that passed without a deal added more of a risk premium to crude.
By early August, that premium had become a significant part of the price.
Scott Bessent, the U.S. Secretary of the Treasury, went on CNBC on Aug. 4 and said something that changed the math. Oil fell sharply before he finished the interview.
What Bessent said about the Strait of Hormuz deal
Speaking on CNBC’s Squawk Box, Bessent was direct about where negotiations stood.
“We are in talks with the Iranians,” he said. “There is a chance we may have a deal today or tomorrow to open the strait and move towards a more normalized position in this conflict,” according to CNBC.
When asked whether Iran would be allowed to charge ships a toll to pass through the waterway, Bessent shut that down.
“It would be freedom of movement,” he said.
That answer matters. One of Iran’s sticking points has been asserting control over shipping through the strait, including the possibility of levying fees on foreign vessels. Bessent’s answer suggests that’s not on the table in the current talks.
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He also added something that gave traders a more immediate reason to act.
“Even though things are still a little dicey there over the past few days, we saw quite a few ships coming out even now.”
That implied the chokehold was already loosening before any formal agreement was signed.
The context behind the talks matters too. President Trump had threatened what Bessent called “the largest military campaign since World War II” against Iran. The threat appears to have moved Tehran.
Because of that pressure, Bessent said, the U.S. is now in active talks with the Iranians.
How oil markets responded to Bessent’s comments
Oil didn’t wait for a signed agreement. Brent closed at $79.36, down 5.3% on the day. West Texas Intermediate settled at $75.77, down 5.7%. Both moved sharply before Bessent even finished the interview, as CNBC reported.
That reaction reflects how much of a geopolitical premium had built up in oil prices over recent months. Traders weren’t waiting for a signed agreement. Bessent’s words were credible enough to prompt a significant unwind of positions that had been built on the assumption of prolonged supply disruption.
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Oil markets move on probabilities. A credible signal that risks are easing is enough to send prices lower, well before any additional barrels reach the market.
Bessent said he expects prices to fall further once the strait fully reopens. More than 1,000 ships are currently waiting to depart the Persian Gulf, according to Benzinga’s coverage of the remarks.
When those ships can move, the physical supply picture changes quickly, and oil prices should follow.
Why the Strait of Hormuz matters for oil and beyond
About one-fifth of everything the world burns in a day moves through the Strait of Hormuz. Saudi Arabia, Iraq, Kuwait, the UAE, and Qatar all send their oil out through that one narrow channel.
When it’s blocked, there is no easy alternative route. Tankers have to go around Africa. That takes weeks and costs significantly more.
Oil is the headline. But Bessent flagged something else on the call. Fertilizers. Refined petroleum products. Industrial gases. All of it stuck behind the same blockade.
When those things can’t move, food gets more expensive. Factories slow down. Chemical plants feel it. The Hormuz closure has been a problem for a lot more than crude prices, most people just haven’t been tracking it that way.
Mines in the strait remain one of the biggest obstacles to getting ships moving again. Tehran is reportedly considering allowing European countries to clear them as part of the negotiations, according to Bloomberg.
Secretary of State Marco Rubio said separately that “progress has been made in those talks, but not finality yet,” noting that the current deal under discussion covers Hormuz specifically, with a separate agreement still needed on Iran’s nuclear program, according to Bloomberg.
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What lower oil prices could mean for consumers
American consumers haven’t seen much relief at the gas pump since the Iran conflict escalated.
GasBuddy analyst Patrick De Haan posted on X that U.S. consumers are unlikely to see lower gasoline prices unless tensions between the U.S. and Iran ease meaningfully. A Hormuz deal would be the most direct path to that.
But analysts warn that even after a deal is signed, physical oil market tightness is projected to persist for at least three months before supply conditions fully normalize, according to ICIS analyst Kojo Orgle. A ceasefire announcement is not the same as oil flowing freely again.
When more than 1,000 ships stuck in the Persian Gulf are finally able to move, the physical supply of crude reaching global markets increases quickly. Refiners get more oil to work with, margins improve, and that eventually shows up at the pump. The lag between a reopened strait and lower gasoline prices isn’t instant, but it’s not long either.
TD Securities director of commodity strategy Ryan McKay offered a cautionary note.
“Iran is unlikely to agree to any deal without getting control of the Strait, and thus we view any potential deal as being highly likely to fail at this point,” he said, according to CNBC.
That’s a real risk. Bessent moved oil markets significantly on Tuesday, but a verbal signal is not a signed agreement. If talks stall or collapse, the geopolitical premium comes right back.
Consumers who are hoping for cheaper gas should watch what negotiators do in the next few days, not what a Treasury secretary says on a morning show.
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