Oil cuts gains, Trump reportedly ready to ease Iran sanctions for nuclear progress

Oil prices on Monday sharply gave up their gains and briefly turned lower after media reports said President Donald Trump was ready to ease sanctions on Iran and release its frozen assets in exchange for concrete progress on the country’s nuclear program.

Crude benchmarks had jumped earlier, as Iran said it would not soften its conditions for reopening the Strait of Hormuz after Trump rejected Tehran’s proposal, keeping uncertainty high over when traffic through the crucial oil shipping route will return to normal.

At 12:33 ET (16:33 GMT), Brent crude futures expiring in November rose 1.2% to $105.56 a barrel, while U.S. West Texas Intermediate crude futures expiring in November added 0.3% to $92.67 a barrel.

Iran’s proposal would allow the Strait of Hormuz to reopen within seven days while broader negotiations resume, provided Washington lifts its naval blockade, eases military pressure, removes sanctions on Iranian oil sales and agrees to a ceasefire.

Iran has said it remains committed to those conditions despite Trump’s rejection.

Trump has nevertheless said he expects negotiations with Iran to resume this week, according to an Axios report. Qatar has been shuttling between the two sides in an effort to revive talks.

The Strait, through which about a fifth of global oil and liquefied natural gas supplies moved before the conflict began, has seen a sharp reduction in shipping activity.

Adding to supply concerns, Iran-backed Houthi forces in Yemen have also stepped up attacks on Saudi Arabia and commercial shipping in the Red Sea.

Saudi Arabia said on Saturday it had intercepted two ballistic missiles and two drones launched by the Houthis, days after intercepting six missiles aimed toward Taif and the Yanbu area.

The disruption has forced Gulf producers to seek alternative ways of moving crude.

Still, there were signs that some oil was moving through the strait at a higher rate. Trump said more than 20 million barrels had transited over the weekend, according to Axios.

The market is also watching refined-product supplies closely. Diesel prices in Europe and the U.S. had reached record highs as disruptions to oil and product exports from the Middle East and Russia tightened fuel markets.