Oil prices fell on Thursday after reports that the US and Iran had agreed on a 60-day extension to their ceasefire, subject to final approval from President Donald Trump.
Axios said negotiators had reached a deal that would also open talks on Tehran’s nuclear programme. The prospect of a diplomatic breakthrough pushed Brent crude down to $93.36 a barrel, from an earlier high near $98, before it recovered to about $94.
For businesses and investors, the move offered a brief sign of relief after months of disruption in one of the world’s most important energy corridors. The conflict, now in its third month, has effectively shut the Strait of Hormuz, the route normally used for around a fifth of global oil and liquefied natural gas shipments.
Prices had already been under pressure this week on hopes that a deal could reopen the waterway. Brent, the global benchmark, traded close to $70 before the war, but briefly touched $120 after US and Israeli strikes on Iran began on 28 February and Tehran threatened ships using the strait.
The market reaction came despite fresh US attacks on Iran, including a strike on a military site in Bandar Abbas, a strategic port city. US Central Command said the action was taken in self-defence and that its forces had also shot down four Iranian drones near Hormuz.
Iran described the attacks as a grave breach of the ceasefire and warned it would respond to further hostility. Kuwait’s military said it was intercepting missile and drone threats.
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