DUBAI, United Arab Emirates (AFP)—The United States was hopeful that a deal to reopen the Strait of Hormuz would be done “today or tomorrow”, a top official said Tuesday, sending oil prices tumbling on optimism for increased shipments in the vital waterway.

US Treasury Secretary Scott Bessent told broadcaster CNBC “there is a chance we may have a deal” in the coming hours, echoing remarks from President Donald Trump the day before.

Speaking from the White House on Monday, Trump kept up his now familiar combination of optimism for diplomacy and bellicose threats, warning that this was Iran’s “last chance before decapitation”.

Tehran and Washington have been at war since February 28, when the US and Israel launched surprise attacks on Iran. Despite a ceasefire and a preliminary deal in the months since, diplomacy has failed to end the conflict.

Underlining the fragility of the situation, one crew member was listed missing Tuesday on a merchant ship hit by a projectile in Hormuz, with fire erupting in the accommodation area.

The Strait of Hormuz, a key conduit for global oil and gas supplies, has been the spark for repeated returns to fighting.

Iran wants to maintain control over and charge tolls in the strait, powers it did not exercise before the war and which the US fiercely opposes.

In what has become a regular pattern, Trump last week threatened to hit Iran “very hard”, potentially with attacks against civilian infrastructure, only to pull back later, hinting that a deal was near.

But Iran’s foreign ministry denied negotiations with Washington were taking place, even as Trump insisted they were happening “right now”.

Secretary of State Marco Rubio said on Tuesday that the United States was involved in negotiations between Oman and Iran on increasing traffic through the Hormuz.

“There’s been progress made in those talks but not finality yet. We’re hoping that will happen very shortly,” he told journalists.

The closure of the Hormuz has rattled global markets, and rekindled hopes for its reopening drove benchmark Brent North Sea Crude prices down nearly five percent to $79.69 per barrel on Tuesday.

– Deal or surrender –

Qatar, which has been mediating negotiations, said that diplomatic efforts were ongoing but that no direct Iran-US talks were planned.

Its leader, Sheikh Tamim bin Hamad Al Thani, spoke with Trump by phone on Tuesday, with the emir’s palace saying they discussed “efforts to de-escalate tensions between the United States of America and the Islamic Republic of Iran and to bring the two sides closer together”.

Trump had previously said he expected to know by Tuesday how the talks were going, “one way or the other”, but insisted “it’s not very complex”.

Washington’s diplomatic goals include reopening Hormuz and the denuclearisation of Iran, which Trump allowed could “take a little while”.

The president had previously called Tehran “duplicitous” for saying it was not negotiating, adding on social media that a US counter-blockade of Iranian ports would stay in place “unless a Deal, or Total Surrender, is accomplished”.

More than five months into a war that has cost Washington billions of dollars, Iran remains able to fire missiles and drones at US and allied targets in the region, as well as at commercial shipping.

Early on Tuesday, Britain’s maritime security agency UKMTO said an unnamed cargo vessel had been struck by an “unknown projectile” in the Strait of Hormuz off the coast of Oman.

Iran continues to impose an effective blockade on the strait and insists ships coordinate crossings with it.

– Red Sea attack –

The disruptions in the Hormuz have only placed greater importance on shipping lanes through the Red Sea, where Iran-backed Houthi rebels in Yemen have declared a maritime blockade on Saudi Arabia.

The Saudi Red Sea port of Yanbu has enabled it to keep up shipments to global markets by circumventing the Hormuz entirely.

But since the Houthis announced their blockade, they have claimed attacks on multiple ships they say are in violation.

On Tuesday, the Indian ship MSV Faize Noore Oliya sank in the Red Sea off Yemen following an unattributed attack, with all of its crew rescued, according to India’s foreign ministry and a local official in Yemen.

“The targeting of commercial shipping in the region must end,” a foreign ministry spokesperson said.

The Red Sea is a gateway to the Suez Canal, and a previous campaign of Houthi attacks on commercial vessels during the Gaza war made passage through the strategic shortcut increasingly untenable, prompting many shippers to instead take lengthy detours around the southern tip of Africa.