Oil Prices Dip Below $90 on Potential US-Iran Deal
Oil prices dipped below $90 per barrel on Friday as the US and Iran inch close to an agreement that could see the reopening of the Strait of Hormuz in the coming days.
Energy prices declined sharply after US President Donald Trump said planned strikes on Iran had been cancelled and that a deal to permanently end the US-Israeli war on Iran could be signed within days.
Brent crude traded at $88.41 per barrel, down around 2.2% from the previous close of $90.38. US benchmark West Texas Intermediate (WTI) fell about 2% to $85.98 per barrel, compared with $87.71 in the previous session.
Heating oil prices declined by 4% to $3.5 per gallon while TTF, the benchmark index for European gas prices, dropped by 1.9% to €49 per megawatt/hour.
The market reacted after Trump cancelled planned strikes against Iran, easing concerns that the reciprocal attacks earlier this week could escalate into a wider regional conflict.
A deal to permanently end the US-Israeli war on Iran could be signed as soon as this weekend, President Trump said Thursday, in a day dominated by whiplash developments.
“We just made a great settlement of the war with Iran, and we’re going to be subject to finalization of documents, which should get done over the next few days. We’ll probably have a signing, maybe in Europe,” Trump told reporters in the Oval Office.
Iran said Thursday that the “main part” of the text of understanding with the US had been finalized, while accusing Washington of undermining progress through shifting positions.
Speaking on Iranian state TV Thursday evening, Foreign Ministry spokesperson Esmaeil Baghaei said Tehran had made clear it would not accept what he described as “illegitimate” demands during indirect contacts with the US.
Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC), in a report published yesterday, forecasted that global oil demand for 2026 will increase by 1 million bpd year-on-year, bringing total demand to 106.13 million bpd.
For 2027, OPEC expects demand to grow by around 1.7 million bpd, reaching 107.86 million bpd.
Analysts said the softer 2026 demand outlook and hopes of de-escalation in the Middle East both weighed on prices, though the market remains sensitive to any sign that negotiations could break down or that shipping through Hormuz could again be disrupted.
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