Oil Falls as Trump Extends Deadline for Iran Deal

Crude oil fell below $80 per barrel on Tuesday, extending losses from the previous session as investors awaited further details of the reported US-Iran peace agreement that could reopen the Strait of Hormuz. The interim accord is expected to be signed in Switzerland on Friday, with President Donald Trump saying the free flow of oil from the Persian Gulf would resume once the deal takes effect. However, neither Washington nor Tehran has released the text of the memorandum of understanding, leaving markets cautious and prompting shipping companies to delay sending vessels through the route until greater clarity emerges. Oil markets have been heavily disrupted since the conflict began in late February, with the near-closure of the Strait of Hormuz affecting roughly one-fifth of global crude shipments.

Crude oil plunged more than 5% to around $80 per barrel on Monday, touching a two-month low after the US and Iran reached a peace agreement aimed at ending the Middle East conflict and reopening the Strait of Hormuz by the end of the week. President Donald Trump announced that oil shipments from the Persian Gulf could soon resume, including the lifting of a US blockade on Iranian ports. The agreement also reportedly includes provisions for dismantling Iran’s nuclear program, along with economic incentives if Tehran meets its commitments. Iranian Deputy Foreign Minister Kazem Gharibabadi confirmed that a deal had been reached and said the text would be released following a signing ceremony in Switzerland. Oil markets have faced significant disruption since the conflict erupted in late February, with the near-closure of the Strait of Hormuz affecting roughly one-fifth of global oil shipments.

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.