Trump Move Sends Oil Futures Down 1.9% as Iran Deal Nears
Oil futures fell to two-month lows on Friday after Donald Trump said he was cancelling more airstrikes on Iran and expected an agreement to be signed soon. U.S. West Texas Intermediate crude futures fell 1.9% to $86.08 a barrel, while Brent dropped 1.5% to $89.08.
Trump’s Iran deal signal
Trump said the agreement would be signed “soon, very soon, maybe over the weekend in Europe,” and added, “The whole Middle East is happy.” He also said the strait of Hormuz would open as soon as the documents of the great settlement were signed, a line that traders could read as a direct signal on one of the world’s most important oil routes.
2.6% had already come off WTI overnight before the later 1.9% decline, and Brent had dropped nearly 3% overnight before ending the session down 1.5%. The move put both benchmarks at two-month lows, showing how fast crude can reprice when Washington signals a possible easing in Middle East risk.
Tehran pushes back
Tehran did not buy the certainty in Trump’s remarks. Iran’s foreign ministry later said it had not made a final decision on an agreement, and a spokesperson said the country would not compromise on its red lines even as a large part of the text had been finalized.
The same spokesperson said the US had repeatedly changed its positions during the talks, leaving the two sides far apart on the final shape of any deal. Earlier in the day, Trump said the US would seize Iran’s Kharg island in the “not too distant future,” then later said that would be off the table “if we sign this agreement.”
Hormuz trade risk
Friday’s price move came against the same backdrop that has kept crude volatile: the strait of Hormuz. Iranian state media said early Friday that Iran forces prevented a tanker from transiting the strait without coordination, while a U.S. official cited by said U.S. forces later shot down two Iranian one-way attack drones near the strait and that traffic flow continued.
Three Indian seafarers were killed in U.S. military strikes against oil tankers travelling through the strait on Wednesday, a reminder that the route remains exposed even when prices ease. For traders, the immediate test is whether the talk of a deal turns into signed paper, because that would shape whether the Hormuz risk premium stays in crude or drains away with the next headline.
