Crude Oil Prices Drop 7% Amid Progress in U.S.-Iran Negotiations

Crude oil prices fell 7% Monday as the U.S. and Iran showed signs of making progress toward an agreement that would end their three-month long war and reopen the Strait of Hormuz, even as the timeline for closing such a deal remained nebulous.

International benchmark Brent futures lost about 7% to close at $96.14 per barrel. West Texas Intermediate futures shed more than 6% to $90.30 per barrel.

U.S. President Donald Trump said Monday in a social media post that he had urged Saudi Arabia, Qatar, Pakistan, Turkey, Egypt and Jordan to join the Abraham Accords and establish diplomatic relations with Israel amid his administration's ongoing negotiations with Iran.

The commander-in-chief added that discussions with the Islamic Republic were "proceeding nicely," although he warned that the U.S. could go back on the offensive if those talks fall apart.

"It will only be a Great Deal for all or, no Deal at all," Trump wrote.

Meanwhile, Iran's chief negotiator and foreign minister met Monday with Qatar Prime Minister Mohammed bin Abdulrahman bin Jassim Al Thani to discuss a potential deal to end the conflict, Reuters reported, citing an official briefed on the matter.

On Saturday, President Trump said an agreement with Iran to open Hormuz, among other issues, was largely negotiated and would be announced soon. The commander-in-chief has previously suggested that the conflict with Iran is on the verge of a resolution, only for tensions to escalate and oil prices to shoot higher again.

U.S. crude oil lost more than 8% last week and Brent tumbled more than 5%, after Trump said he called off imminent airstrikes against Iran to allow more time for negotiations. Prices have surged more than 30% since the U.S. and Israel attacked Iran on Feb. 28.

Iran has imposed a de facto blockade of shipping through Hormuz since early March, requiring vessels to receive its permission to pass or risk attack. The blockade was imposed after U.S. and Israeli airstrikes killed the Islamic Republic's head of state Ayatollah Ali Khamenei and other top leadership.

Hormuz is one of the most important chokepoints for the oil market in the world, with about 20% of global supply passing through the sea lane before the war. Iran's blockade has dramatically cut oil exports from the Middle East as a consequence, triggering the largest supply disruption in history.

The U.S. has imposed a blockade of Iran's ports and vessels in response. Trump said Sunday the U.S. blockade would remain in "full force and effect until an agreement is reached, certified, and signed."

– CNBC's Joseph Wilkins and Liz Napolitano contributed to this report.