Oil futures tumbled midday Wednesday amid reports of progress toward a U.S.-Iran peace deal and the potential reopening of the Strait of Hormuz.
As of 11:35 a.m. ET, the June West Texas Intermediate contract was trading $7.62 lower at $94.65/bbl, with July down $6.85 at $91.22/bbl. The July ICE
Brent crude contract fell $8.42 to trade at $101.45/bbl, with the August contract down $7.60 at $97.34/bbl.
Refined product futures were also trading sharply lower. The June RBOB contract fell 18.58cts to $3.4348/gal, with July down 17.27cts at $3.2958/gal. The June ULSD contract dropped 22.12cts to $3.809/gal, with July down 21.69cts at $3.6951/gal.
Crude futures fell as much as 12% earlier in the session before paring losses, amid reports that the U.S. and Iran are nearing a preliminary agreement to end the war. An Axios report cited U.S. officials as saying a framework memo is being drafted to guide further nuclear negotiations, while President Donald Trump said a deal could lead to reopening the Strait of Hormuz.
While the market reacted to the prospect that easing tensions could eventually restore disrupted crude flows, analysts cautioned that any recovery in supply would take time. Rystad Energy said a potential agreement would likely amount to a temporary pause rather than a full resolution, with a phased reopening of the strait over about 30 days and meaningful volume recovery not expected until June at the earliest.
Markets are weighing the fragility of the negotiations, with Trump indicating the agreement remains uncertain and warning that military action could resume if terms are not met.
This content was created by Oil Price Information Service, which is operated by Dow Jones & Co. OPIS is run independently from Dow Jones Newswires and The Wall Street Journal.
Reporting by Allegra Fradkin, afradkin@opisnet.com; Editing by Michael Kelly, mkelly@opisnet.com
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(END) Dow Jones Newswires
05-06-26 1255ET
