Oil prices fell more than 4% to two-week lows ‌on Monday as optimism grew that the United States and Iran were moving closer to a peace deal, even though they remain at odds over key issues such as blockades on the Strait of Hormuz.

Brent crude futures were down $4.44, or 4.3%, to $99.10 a barrel ​at 0822 GMT, while US West Texas Intermediate futures were at $92.24 a barrel, down $4.36, or 4.5%. Both ​contracts touched their lowest since May 7 earlier in the session.

On Saturday, United States President Donald Trump said Washington and Iran had “largely negotiated” an understanding on a peace deal that would reopen the Strait of Hormuz, which carried a fifth of global shipments of oil and liquefied natural gas before the conflict.

However, the ​two sides remain at odds over several difficult issues, with Trump saying on Sunday he had told his representatives not to rush into any deal.

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“We’ve been at this stage before, only for talks to break down. Therefore, the market will likely be more cautious about ​overreacting,” said Warren Patterson, head of commodities strategy at ING.

Both sides played down hopes for an imminent breakthrough ​on Monday, with US Secretary of State Marco Rubio saying there will either be a good agreement or Washington would deal with ‌Iran ⁠in “another way.”

Iran’s Foreign Ministry Spokesperson Esmaeil Baghaei said on Monday that Iran was negotiating an end to the war and was not currently discussing nuclear issues. Meanwhile, analysts expect a return to normal oil flows through the strait to take months, while damaged oil and gas facilities are repaired.

“We continue to believe that the key factors for the oil ​market to watch should be ​the physical oil flows⁠, and so far, flows through the Strait remain restricted,” UBS analyst Giovanni Staunovo said.

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Two liquefied natural gas tankers were exiting the Strait on Monday, heading to Pakistan and China, ​while a supertanker with Iraqi crude left the Gulf for China on Saturday ​after being stranded ⁠for nearly three months, shipping data showed.

US energy firms responded to higher local energy prices by adding oil and natural gas rigs for the fifth week in a row, for the first time since February 2025.

The rig count, an early ⁠indicator of ​future output, rose by seven to 558 in the week to ​May 22, its highest since June 2025. Even so, Baker Hughes said the total count was still down eight rigs, or 1%, from this ​time last year.