Oil Falls on Friday, Set for Monthly Drop

WTI crude oil futures fell about 2% to $87.2 per barrel on Friday, the lowest in roughly six weeks, putting them on track for a 17% decline in May. The move followed reports that the US and Iran have reached a preliminary agreement to extend a ceasefire and ease restrictions on shipping through the Strait of Hormuz, although President Donald Trump has not yet approved the deal and Iranian state media said it has not been finalized. The potential agreement has raised expectations of an eventual end to the US-Israeli war in Iran and a reopening of the Strait of Hormuz, a critical route for about one-fifth of global oil and LNG flows. Analysts warn that any recovery in flows would likely be slow, as mines would need clearing, damaged infrastructure repaired and shut-in production restarted, with tanker delays also limiting supply restoration.

WTI crude futures fell below $88 per barrel on Friday and remained on track for a sharp monthly loss after reports indicated that the US and Iran had tentatively agreed to extend their ceasefire by 60 days and possibly permit unrestricted shipping through the Strait of Hormuz. The report also stated that Iran would clear all mines from the waterway within 30 days. Still, it noted that President Donald Trump has not yet approved the proposed terms, while Vice President JD Vance cautioned that it remains uncertain whether or when an agreement with Iran could be finalized. The US oil benchmark has dropped more than 12% so far this month as optimism grew that some form of deal could eventually be reached, though major obstacles remain, including Tehran’s nuclear ambitions, control of the Hormuz passage and sanctions relief.

WTI crude oil futures fluctuated between gains and losses around $89 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.