Brent oil futures for July slipped 5.6% to $97.74 a barrel

Oil prices dropped sharply in Asian trade on Monday, with Brent breaking below $100 a barrel.

Brent oil futures for July slipped 5.6% to $97.74 a barrel by 05:09 GMT.

The contract dropped to their weakest levels in nearly three weeks.

Oil prices declined further on Monday after the U.S. Secretary of State flagged some progress towards a deal to reopen the Strait of Hormuz.

The Secretary of State said the U.S. and Iran had a pretty solid framework deal on reopening Hormuz, but hinted at other actions in case a deal is not reached.

His comments came after the U.S. president over the weekend said the U.S. was close to finalizing a framework deal with Iran.

Reports also showed both sides and mediators flagging progress towards a deal. But Iranian state media contradicted Trump’s claims that a deal was nearly final.

Trump later said there was no rush to strike a deal with Iran.

Tehran and Washington remained at odds over several key issues. Tehran has rejected certain U.S. demands.

Crude prices were nursing deep losses from last week, amid growing bets that an Iran-U.S. deal was close.

Reports on Monday showed a few vessels passing through the Strait of Hormuz, although traffic still remained at a fraction of pre-war levels.

The channel’s closure was a key point of support for oil prices, given that prior to the Iran war, around 20% of the world’s oil supplies had passed through Hormuz.

Iran was seen preparing measures to charge for commercial shipping through Hormuz – a move that could spur more clashes with the U.S.