WASHINGTON (dpa-AFX) - Extending the losses from yesterday's session, crude oil prices have gone into freefall on Wednesday as investor expectations on a potential U.S.-Iran agreement continue to rise despite the U.S. refusing to ease its demands.
WTI Crude Oil for July month delivery was last seen trading down by $5.05 (or 5.38%) at $88.84 per barrel.
The war between the U.S. and Iran entered day number 89 today. Iran shut the Strait of Hormuz soon after the war erupted while U.S. President Donald Trump enforced a naval blockade on Iranian ports.
The consequent disruption in oil and energy transit across Arab nations has severely jolted the global economy, keeping inflationary concerns elevated.
Several rounds of negotiations hosted by the U.S. allies and Iran's neighbors hit a roadblock after the U.S. demanded Iran halt its nuclear programs while the ruling Iranian regime rejected this.
On Sunday, Trump made a surprise demand, asking leaders of Arab nations to join the Abraham Accords brought in during his first term to serve as a bridge between Israel and Arab nations.
Amid this, U.S. Central Command reported on Monday that it carried out strikes on southern Iran in the Bandar Abbas region, targeting missile-launching sites and Iranian boats trying to place naval mines.
Though U.S. forces called these attacks an act of self-defense, Iran called it a violation of the ceasefire.
Diplomatic efforts to arrive at an agreement to end the hostilities are continuing.
A delegation including Iranian Parliamentary Speaker Mohammad Bagher Ghalibaf and Foreign Minister Abbas Araghchi travelled to Qatar on Monday to discuss measures with Qatari mediators to resolve disputes preventing an agreement and returned to Iran after the talks.
Yesterday, U.S. Secretary of State Marco Rubio stated that the prolonged shutdown of the Strait of Hormuz is unacceptable and added that the U.S.-Iran peace talks could go on for a few more days since there is a lot of back and forth negotiations involved.
Today, Iranian state television broadcast, what it called, the details of a draft proposal seeking to end the war. It showed a Memorandum of Understanding, which if agreed by both nations, would render reopening of the Strait of Hormuz by Iran and restore shipping through the seaway to pre-war levels.
In return, the U.S. would lift its earlier-enforced naval blockade on Iranian ports.
Further, it stated that the current ceasefire would be extended for another 60 days during which period, the U.S. and Iran would hold talks on Iran's nuclear ambitions.
Hours later, the White House called the report untrue and the MoU draft a complete fabrication.
In a telephonic interview with PBS News, Trump stated that Iran would not get relief from the U.S. sanctions in exchange for giving up its highly enriched uranium.
Speaking to reporters at the White House, Trump stated that Iran wants to make a deal but the U.S. is not satisfied with their offers and asserted that the Strait of Hormuz should be open for everybody.
Despite the rigid U.S. stance, experts are of the view that a deal could be reached as pressure is building on both the nations to reopen the strait.
The inventory data releases from the American Petroleum Institute later today and the Energy Information Administration tomorrow could shed more light on the oil market status and impact prices.
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