Global oil markets have fallen sharply as traders react to growing hopes of a US Iran peace deal. The expected reopening of the Strait of Hormuz has triggered a strong drop in prices. This waterway is one of the most important routes for global oil transport. Brent crude oil dropped around 4% in early Asian trading. Prices fell to just under $84 per barrel. This marks one of the lowest levels seen since the start of the recent regional conflict. Market sentiment shifted quickly after signs of progress in peace talks between the United States and Iran. The sudden change came after comments from US President Donald Trump. He said a deal was “now complete” and suggested that the Strait of Hormuz would reopen soon. He also posted that US naval restrictions in the area would be lifted. His message raised hopes that global oil flow could return to normal. The Strait of Hormuz is a key passage for global energy supply. A large share of the world’s oil passes through it every day. When tensions closed or limited access, global supply dropped sharply. This helped push prices higher during the conflict. Now, expectations of reopening are pushing prices down again. Trump later clarified that the strait would fully reopen after the peace deal is signed later this week. He said the process would also include safety work, such as mine removal. This added some uncertainty to the timing of full shipping recovery. Iranian officials and mediators have also confirmed parts of the agreement. They say a broader 60-day negotiation phase will follow the initial deal. This phase is expected to cover major issues such as Iran’s nuclear program and sanctions relief. Oil markets reacted immediately to the news. Brent crude had already fallen from $93 per barrel earlier in the week. It dropped to $87.50 on Friday and extended losses into the new trading week. Traders said the market is now pricing in a possible return of Gulf oil flows. The war had previously cut a large amount of oil supply from global markets. Before the disruption, about 20 million barrels of oil per day moved through the Strait of Hormuz. When fighting escalated, most of this flow was blocked or delayed. This created one of the biggest supply shocks in recent years. Producers tried to reduce the impact by using alternative routes. Around 5 million barrels per day were redirected through pipelines and other export points. Some oil was also moved through special shipping methods with support from naval operations. However, supply remained tight during the crisis. Even now, shipping disruptions have not fully ended. Reports suggest dozens of vessels remain stuck in or near the strait. The Japanese Shipowners’ Association said 38 Japan-linked ships are still waiting for clearance. Companies are waiting for clearer instructions before resuming normal routes. At the same time, global supply has been supported by emergency measures. The International Energy Agency released large emergency reserves into the market. This added around 2.5 million barrels per day of extra supply during the crisis period. Demand has also weakened in several regions. China has reduced imports significantly, using stored reserves instead. Industrial slowdown in parts of Asia has also lowered energy consumption. Analysts estimate global demand may have dropped by 3 to 4 million barrels per day during the conflict. Market experts say the situation remains uncertain. Some believe prices may continue to fall if the peace deal is fully signed and enforced. Others warn that demand could rise again in the coming months as global economies recover and travel increases. Analysts also note that rebuilding supply chains will take time. Even if the Strait of Hormuz reopens soon, shipping, insurance, and infrastructure challenges may slow recovery. Some experts expect the market disruption to continue into next year. For now, traders are watching diplomatic talks closely. The next key moment is expected to be the signing of the agreement in Switzerland. Until then, oil markets are likely to remain highly sensitive to any new political developments in the region.