WASHINGTON (dpa-AFX) - Crude oil prices have plummeted on Friday, extending yesterday's sharp losses after U.S. President Donald Trump claimed that a U.S.-Iran interim peace agreement will be signed over this weekend and affirmed soon after that the Strait of Hormuz will reopen. The message resulted in waning supply disruption concerns.
WTI Crude Oil for July month delivery was last seen trading down by $2.86 (or 3.26%) at $84.85 per barrel.
Today is day number 105 of the war between U.S.-Israeli forces and Iran.
A ceasefire was announced in April and extended later to facilitate negotiations. However, the intermittent exchange of attacks threatened the longevity of the truce.
Days before, after a U.S. Apache helicopter was downed by Iranian forces, Trump vowed to give back a fitting reply to Iran.
Under Trump's orders, U.S. forces targeted Iran. Iran retaliated by striking U.S. bases in the Arab region.
Yesterday, Trump announced that Iran will be hit very hard and U.S. forces will take control of Iran's Kharg Island.
In an interview with Fox News, Trump stated that the attacks would be more powerful and bigger than ever.
The threat of an intense war sent crude oil prices on the upside.
However, hours before the strikes were set to begin, Trump messaged via Truth Social that negotiations with Iran came to a close and the final decision on an agreement has been approved both by Iran's highest leadership as well as Iran's neighboring nations.
Hence, Trump stated that he had cancelled the planned strikes, adding that place and time of signing the deal will be announced shortly.
Speaking to reporters at the White House, Trump stated that the deal could possibly be signed in Europe by this weekend, and reaffirmed that the Hormuz strait would be reopened soon after. Trump, however, refrained from giving any deadline.
Earlier, reasserting U.S. authority over the Strait of Hormuz, Trump messaged via Truth Social that nearly 200 tankers were escorted out of the blockaded channel without Iran's knowledge by U.S. forces, shipping more than 100 million barrels of oil to their respective buyers.
U.S. Energy Secretary Chris Wright stated that the U.S. military is assisting to move roughly 7 million barrels per day of crude oil from the Persian Gulf.
According to Bloomberg News, the agreement could be signed in Geneva by June 14.
While Iran admitted that discussions were taking place, it contradicted Trump's contention that a deal could be signed in a couple of days and stated that nothing has been finalized.
So far, details on how the U.S. and Iran plan to resolve disputes over Iran's nuclear programs, U.S. sanctions on Iran, authority over Strait of Hormuz, Israel-Lebanon ceasefire, and unfreezing of Iran's assets in foreign countries have not emerged.
Energy experts received Trump's assurance with cautious optimism as his previous claims have not matched reality. However, it was enough to calm markets, which weighed on oil prices.
The U.S. dollar index was last seen trading at 99.74, up by 0.01 (or 0.01%) today.
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