Oil prices head for sharp weekly losses on U.S.-Iran ceasefire progress

As of 21:55 ET (01:55 GMT), Brent Oil Futures for July delivery slipped 0.5% to $93.24 per barrel, while West Texas Intermediate (WTI) crude futures declined 0.9% to $88.17 per barrel. Both benchmarks were set to post weekly losses of nearly 10%.

Oil market reacts to U.S.-Iran ceasefire developments

Market sentiment shifted after reports indicated that Washington and Tehran had reached a draft agreement to extend their ceasefire for 60 days. The extension is intended to allow negotiations to continue on Iran’s nuclear program and regional security issues. The draft deal still requires approval from U.S. President Donald Trump.

The prospect of a peace agreement reduced immediate concerns over supply disruptions and supported expectations that shipping through the Strait of Hormuz could gradually normalize. Despite this, traffic through the strategic waterway remains well below pre-conflict levels, maintaining a geopolitical risk premium in oil prices.

Oil prices have shown marked volatility in recent sessions, driven by rapidly changing headlines around ceasefire talks. Crude briefly rebounded on Thursday following reports of fresh military exchanges between U.S. and Iranian forces, but those gains later faded as renewed diplomatic optimism emerged.

Macro backdrop: inflation concerns and softer U.S. growth

Investors were also weighing the broader macroeconomic environment. Recent U.S. inflation data indicated that price pressures remained elevated, with higher-than-expected personal consumption expenditures inflation reinforcing expectations that the Federal Reserve may keep interest rates higher for longer.

At the same time, revised U.S. economic growth figures pointed to softer momentum in the first quarter. This has added to concerns about the outlook for global energy demand, compounding the impact of easing geopolitical tensions on oil prices.

The combination of improving ceasefire prospects, persistent inflation, and slower U.S. growth has contributed to the nearly 10% weekly losses in both Brent and WTI, representing their sharpest declines in months.

FAQ

What were the latest Brent and WTI prices in Asian trading?
Brent Oil Futures for July delivery were at $93.24 per barrel, down 0.5%, while WTI crude futures were at $88.17 per barrel, down 0.9% as of 21:55 ET (01:55 GMT).

How much have oil prices fallen this week?
Both Brent and WTI benchmarks were on track to record weekly losses of nearly 10%, marking their steepest weekly declines in months.

What is driving the recent decline in oil prices?
The decline is being driven by progress toward a U.S.-Iran ceasefire extension, reduced immediate supply concerns in the Strait of Hormuz, ongoing volatility around geopolitical developments, elevated U.S. inflation that may keep interest rates higher for longer, and softer U.S. economic growth data.

Does the U.S.-Iran draft agreement have final approval?
No. The reported draft agreement to extend the ceasefire for 60 days still requires approval from U.S. President Donald Trump.