Oil futures fell by more than 2% on Friday and were on track for their largest weekly loss since early April, following reports that the United States and Iran had reached an agreement on a possible extension of the ceasefire.
July Brent crude futures settled at $92.05 per barrel, down $1.66, or 1.8%. U.S. West Texas Intermediate (WTI) crude futures fell $1.54, or 1.7%, to settle at $87.36 per barrel.
John Kilduff, partner at Again Capital, said: “The market clearly believes the ceasefire will be easy to maintain and that the situation is essentially over.”
The three-month conflict between the United States and Iran has repeatedly been accompanied by speculation that an end to hostilities is near, which could lead to the reopening of the Strait of Hormuz, a vital route through which about one-fifth of global oil and gas supplies pass. Although both sides have suggested that an agreement may be close, their descriptions of the proposed deal have differed somewhat.
Iran’s Fars News Agency reported that the agreement—still awaiting Tehran’s approval—would require Iran to reopen the Strait without restrictions. However, the agency added that Iran intends to reopen the waterway “according to its pre-arranged procedures.” Following the conflict, Iran announced plans to regulate traffic through the Strait and impose transit fees.
U.S. President Donald Trump again called on Iran to reopen the Strait immediately. The closure of the strategic waterway had triggered sharp increases in global energy prices. In recent trading sessions, both oil benchmarks experienced swings of as much as six dollars per barrel due to conflicting signals about the Strait’s potential reopening.
Brent crude fell nearly 11% this week, marking its largest weekly decline in seven weeks. WTI crude dropped more than 9%, recording its biggest weekly loss in six weeks. Both benchmarks reached their lowest levels since mid-April.
Sources told Reuters on Thursday that the United States and Iran had reached an agreement to extend the ceasefire and ease restrictions on navigation through the Strait of Hormuz.
However, shipping traffic through the Strait remains well below pre-war levels. Analysts at ING said reopening the Strait would provide an immediate boost to the oil market, although a full recovery remains uncertain.
Japan, which relies heavily on Middle Eastern oil imports, reported a 66% decline in crude oil imports last month compared with April 2025.
Meanwhile, Commerzbank raised its Brent crude forecast to $90 per barrel by the end of September and $85 per barrel by year-end, based on the assumption that the Strait of Hormuz will remain closed to normal shipping traffic for another two months.
The U.S. Energy Information Administration reported on Thursday that U.S. inventories of crude oil, gasoline, and distillates declined last week as refinery and consumer demand increased, while exports fell by 1.16 million barrels per day to 4.4 million barrels per day.
Reuters
