Oil Swings as US and Iran Near Hormuz Deal

Brent crude oil futures fluctuated between gains and losses around $95 per barrel on Wednesday following reports that the US and Iran reached a preliminary agreement to extend their ceasefire and begin negotiations on Iran’s nuclear program. According to Axios, the proposed 60-day memorandum of understanding would guarantee unrestricted shipping through the Strait of Hormuz, though the deal still requires approval from President Donald Trump. The report also said Iran would remove all mines from the strait within 30 days. Earlier in the session, oil prices rose about 2% after the US said it destroyed several attack drones near Hormuz, while Kuwait reported intercepting a missile fired toward the country. Iran’s Revolutionary Guard also said several ships attempted unauthorized entry into the Persian Gulf, warning it would respond strongly to any disruption in the waterway.

Brent crude oil futures rose toward $96 per barrel on Thursday after renewed attacks in the Persian Gulf increased concerns over energy supplies, while traders continued to watch for signs of progress in US-Iran peace talks that could reopen the Strait of Hormuz. The US said it destroyed several attack drones near the strait, while Kuwait reported intercepting a missile fired toward the country. Iran’s Revolutionary Guard said several ships attempted unauthorized entry into the Persian Gulf, with some forced to turn back, warning it would respond strongly to any disruption in Hormuz. Despite the rebound, oil prices remain sharply lower for the week and month as markets still expect a potential deal between Washington and Tehran. Negotiations remain difficult, with disagreements over Iran’s nuclear program and control of Hormuz. Meanwhile, US crude inventories fell by 2.8 million barrels last week according to the API.

Brent crude futures climbed toward $97 per barrel on Thursday, rebounding from losses in the previous session as renewed hostilities between the US and Iran weakened expectations for a near-term peace agreement that could end the conflict and reopen the Strait of Hormuz. US forces reportedly struck an Iranian military site believed to pose a threat to American troops and commercial shipping routes through Hormuz, while also intercepting Iranian drones. Meanwhile, Iran’s Revolutionary Guard said it had targeted a US airbase, though it did not disclose the location. Washington and Tehran also remained at odds over major sticking points in negotiations, including Iran’s insistence on maintaining control of the strait and preserving its nuclear program. Despite the latest escalation, oil prices are still on track for a second consecutive weekly decline amid expectations that both sides could eventually reach a peace agreement and reopen the Strait of Hormuz.