Oil prices fell about 5% to a three-month low on Tuesday as traders hoped the US and Iran would agree to end the war and allow oil to flow through the Strait of Hormuz.

Prices, which were already down about 4% Tuesday morning, extended those losses following a Wall Street Journal report that the US would allow Iran to immediately begin selling oil and fuel under the memorandum of understanding. Brent crude futures fell $4.25, or 5.1%, to $78.92 a barrel at 1602 GMT. US West Texas Intermediate crude fell $4.80, or 5.9%, to $75.95.