Brent traded near $92 a barrel, set for a 19% monthly drop, the biggest since 2020. President Donald Trump has yet to sign off on the terms of the agreement, according to a person familiar with the matter. Axios earlier reported that shipping through the strait would be “unrestricted.”

Still, Vice President JD Vance told reporters that it was too early to know “when or if” a deal with Iran would be reached. Earlier, Treasury Secretary Scott Bessent said only that “the teams have been going back and forth,” when pressed if an interim agreement had been clinched.

Crude has weakened in May on speculation some form of accord would be reached, although the warring parties have hailed progress before, only for the stalemate to drag on.

While the effective closure of Hormuz — which is subject to blockades by Washington and Tehran — has curbed global energy supplies, a range of solutions, from bumper US exports, a slowdown in Chinese imports and emergency reserve releases have quelled the worst of the market impact.

“Market hopes are clearly high that we are now on a road to some kind of resolution,” said Bjarne Schieldrop, chief commodities analyst at SEB AB. “The likely path out of this war has for quite some time now been a deal which is essentially not a deal, but rather an agreement to talk further and to resolve contentious issues later.”

At this stage, it remains unclear how sticking points in the negotiations — including the Islamic Republic’s nuclear program, Iran retaining control over Hormuz, and sanctions relief — stand to be addressed. The waterway’s reopening and Iran turning over highly enriched uranium were Trump’s “red lines” necessary for any pact, Bessent said.

Even if a truce extension is agreed, multiple hurdles stand to impede the resumption of oil flows. Among them, mines in the Hormuz waterway must be removed, shut-in fields may take months to restart, and damage to energy infrastructure from drone and missile strikes needs to be repaired. In addition, vessels would take weeks to reach importing nations.