Oil fell as senior US officials gave further, positive signals on progress towards a deal with Iran to reopen the Strait of Hormuz.

Brent lost as much as 6.2 per cent to US$97.10 a barrel, while West Texas Intermediate was near US$91. Secretary of State Marco Rubio struck a cautiously upbeat tone, saying the US was going to give diplomacy every chance. “We thought we might have some news last night,” he said in New Delhi. “Maybe today.”

At the weekend, US President Donald Trump said “negotiations were proceeding in an orderly and constructive manner”, although the US would not rush into a deal, according to his social-media posts. He added that Washington’s blockade of the strait would remain until an agreement was completed. Any final approval may take several days, according to senior US officials.

Still, it remains unclear how key differences, including the fate of the Islamic Republic’s nuclear programme, will be addressed. Iran’s Tasnim news agency said the draft agreement could still collapse because the US was obstructing some key clauses, including a demand that its assets be unfrozen.

Global energy markets have been upended by the crisis, which began in February when the US and Israel attacked Iran. The conflict spread rapidly across the Persian Gulf region, forcing producers to shut in millions of barrels of daily crude supplies. Hormuz – which links the region to global markets – has been subject to a double blockade by both Tehran and Washington.

Trading in oil may be quieter than usual on Monday, with some traders away for public holidays in the US and the UK. The US break for Memorial Day traditionally marks the start of the summer travel season, a period when demand for petrol, diesel and jet fuel can be expected to rise.