Crude Falls on Hopes of US-Iran Deal

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.

Crude oil dropped below $86 per barrel on Friday, hitting its lowest level in nearly two months after President Donald Trump said a peace agreement with Iran could be reached as early as this weekend. The remarks came after he delayed planned military strikes and warned that the US could target Iran's oil infrastructure. Iran's semi-official Fars news agency reported that Tehran was likely to accept the deal, although no final text has been approved by either side. Trump said the agreement would reopen shipping through the Strait of Hormuz and include Iranian commitments to forgo developing nuclear weapons. Still, traders remained cautious, as even a breakthrough would face significant obstacles before oil flows fully normalize, including clearing mines from Hormuz, restarting idled production fields, and repairing energy facilities damaged by drone and missile attacks.