Oil dropped as traders reacted to US-Iran negotiations nearing a deal, though President Donald Trump reinforced that Washington's blockade of the Strait of Hormuz would hold until an agreement was completed. The uncertainty around timing and conditions kept investors cautious, with futures moving lower as optimism over a resolution collided with the prospect of a prolonged blockade.

The Strait of Hormuz carries a major share of global crude shipments, making any disruption a direct threat to supply chains and energy markets. Trump's firm stance that the blockade remains until a finished deal signals diplomatic progress alone won't shift pricing, leaving oil prices vulnerable to headline risk.

Markets now sit on the edge of the Hormuz issue. A deal would likely lift the blockade and push prices higher, but traders are pricing in delay and conditional language. The standoff shows how much political language around energy supply still moves barrels.