Crude Oil Prices Pare Some Gains

Crude oil fell 3.2% to $84.88 per barrel as expectations increased that the US and Iran could reach an agreement to reopen the Strait of Hormuz, although officials warned a deal was not guaranteed. Prices declined about 6% this week but remain more than 20% higher since the US and Israel launched attacks on Iran on February 28. A Trump administration official said there is an 80% chance of a deal being signed soon, with the agreement potentially involving the reopening of Hormuz, removal of the naval blockade, dismantling of Iran’s nuclear program and economic incentives if Tehran complies. However, conflicting reports emerged after Iranian media published a draft proposal suggesting different terms, including US force withdrawals and reconstruction funding. President Trump said it did not reflect the agreed terms. Pakistan’s Prime Minister said a final text had been reached, while Iran’s foreign minister said an understanding was closer than ever but urged caution until finalized.

Crude oil fell more than 3% to below $85 per barrel on Friday, reaching an eight-week low as hopes increased that the US and Iran could be close to an interim peace agreement, despite remaining uncertainties. Officials said both sides are moving toward a deal to reopen the Strait of Hormuz, potentially in time for the upcoming G7 meeting. Iran’s Foreign Minister Abbas Araghchi said a Memorandum of Understanding between the two countries had never been closer, supporting expectations that the prolonged conflict could be nearing an end. However, traders remain cautious after previous reports of breakthroughs failed to materialize. Risks remain, with reports of US forces intercepting Iranian drones near commercial vessels. Prices briefly recovered after President Trump cast doubt on the reported draft agreement, saying the published terms did not reflect the agreement discussed.

Crude oil fell more than 4% to below $84 per barrel on Friday, extending losses to an eight-week low as hopes grew that the US and Iran could reach a peace agreement and end the conflict that has disrupted energy markets. Iran’s Mehr News Agency reported that a 14-point draft agreement includes the lifting of oil sanctions and a commitment from Tehran to reopen the Strait of Hormuz within 30 days, although the proposal still requires approval from Iranian authorities. President Trump said a deal could be signed as soon as this weekend in Europe. The reported agreement would also involve the release of frozen Iranian funds, the suspension of sanctions, and the withdrawal of US forces from the region. Despite improving sentiment, risks remain as tensions continue in the Strait of Hormuz, with reports of drones targeting commercial vessels. Iran has threatened to keep the waterway closed, though tanker traffic has started to increase in recent weeks.