International oil prices came under strong pressure on Wednesday. US WTI led the losses, recording a significant drop of 6%, with its price settling at $88.3 per barrel. This decline was triggered by reports from Iran’s state television, according to which Tehran commits to fully restoring safe navigation through the Strait of Hormuz within the next month.
Read: Oil: WTI price retreats despite new US strikes on Iran – At $91.33 per barrel
6% oil plunge amid upcoming US-Iran deal
Brent recorded losses above 5% at $94.7 per barrel.
The main points of the memorandum revealed by the Iranians include:
- US military forces will withdraw from the region around Iran.
- The US Navy will lift the naval blockade of the Strait of Hormuz.
- Iran committed to restore the number of commercial vessels passing through the Strait to pre-war levels within one month.
- Iranian state media report that military vessels are not included in this draft agreement.
- Management and guidance of navigation through the Strait of Hormuz will be handled by Iran in cooperation with Oman.
- If the final agreement is reached within 60 days, it will be approved as a binding UN Security Council resolution.
The Strait of Hormuz, through which approximately 20% of global oil and LNG flows pass, remains critically important for international energy markets.
According to the same reports, at least two non-Iranian flagged supertankers crossed the Strait on Tuesday, marking the first significant cargo movement in a week.
It is estimated that approximately 4 million barrels of crude oil passed through the maritime passage without restrictions.
These developments boosted market optimism that the US and Iran are approaching an agreement for the full reopening of Hormuz and de-escalation of the Middle East crisis.
Oil prices are now moving near five-week lows, while total May losses exceed 16%, following the intense rally in March and April.
An Iranian official stated that indirect talks with Washington continue, while US Secretary of State Marco Rubio warned that a final peace agreement may still need several more days to complete.
