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Oil prices fell to a two-month low after Donald Trump said a peace agreement with Iran could be signed this weekend, raising hopes of renewed energy flows through the Strait of Hormuz
Oil prices dropped to their lowest level since April on Thursday after US President Donald Trump said a peace agreement with Iran could be signed as early as this weekend, raising hopes that a resolution to the conflict could restore critical energy flows through the Strait of Hormuz.
US benchmark West Texas Intermediate (WTI) crude tumbled nearly 3 per cent at the open, falling to $85.13 a barrel — its lowest level since April 17 — before recovering some of its losses later in the session.
The decline followed Trump’s remarks suggesting that
negotiations with Tehran were nearing a breakthrough, despite ongoing military strikes and the absence of any official confirmation from Iranian authorities.
Speaking to reporters in the Oval Office, Trump said a deal could be signed in Europe as soon as this weekend and indicated that Vice President JD Vance would attend if an agreement is reached. He also claimed that Iran’s Supreme Leader had agreed to the framework of a deal, while cautioning that the accord had not yet been finalised.
“We’re very close,” Trump said, adding that the proposed agreement would reopen shipping through the Strait of Hormuz and include commitments from Tehran not to pursue nuclear weapons.
The comments represented a sharp shift in tone after Trump earlier threatened further military action against Iran and warned that Washington could target the country’s oil infrastructure if negotiations failed.
However, Iranian officials appeared to downplay suggestions that a deal was imminent. Iran’s semi-official Fars news agency reported that Tehran had not yet approved any final text for an agreement with the United States.
The uncertainty comes after US forces carried out a second consecutive day of strikes against Iranian targets early Thursday. Trump had accused Tehran of delaying talks on an interim peace arrangement aimed at ending months of conflict that have severely disrupted global energy markets.
The war has effectively led to the near-total closure of the Strait of Hormuz, one of the world’s most important energy chokepoints. The waterway handles a significant share of global crude oil, fuel and liquefied natural gas shipments, and disruptions have fuelled concerns about supply.
Trump has repeatedly stated in recent months that a deal with Iran was close, though previous negotiations have failed to produce a final agreement. Key sticking points have included Iran’s nuclear programme and access to billions of dollars in frozen assets.
Frequently Asked Questions
Will the US-Iran peace deal stabilize global oil prices?
The US-Iran ceasefire and subsequent reopening of the Strait of Hormuz have led to a significant drop in oil prices, with Brent crude falling below $95 per barrel. This development has eased immediate fears of supply disruptions, though underlying risks and tensions remain.
How would a deal impact the Strait of Hormuz shipping?
Iran has declared the Strait of Hormuz “completely open” for commercial vessels during the ceasefire period, following a US-brokered peace deal. This move has eased fears of supply disruptions and led to a sharp drop in global oil prices.
What are the main obstacles to a US-Iran agreement?
The main obstacles to a US-Iran agreement include fundamental disagreements over Iran’s nuclear program, with Tehran insisting on its sovereign right to enrich uranium, and the US demanding “zero-enrichment” or dismantlement.
First Published:
June 12, 2026, 05:36 IST
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