Key Takeaways

• Prices ease further: Brent crude fell 0.5% to $93.24 per barrel, while WTI dropped 0.9% to $88.17.
• Brutal weekly loss: Both benchmarks on track for nearly 10% weekly declines — their steepest in months.
• 60-day ceasefire draft: Reports indicate Washington and Tehran have reached a draft agreement to extend the truce while nuclear and regional security talks continue.
• Trump approval needed: The proposed deal still requires the president’s sign-off.
• Hormuz normalization hopes: The prospect of a deal has reduced immediate supply shortage concerns and raised expectations of gradual shipping recovery.
• Hormuz still below pre-war levels: Traffic through the strategic waterway remains well below normal, keeping a risk premium embedded in oil markets.
• Volatile week: Oil briefly rebounded Thursday on fresh U.S.-Iran military exchanges before fading on diplomatic optimism.
• PCE inflation concern: Higher-than-expected personal consumption expenditures data reinforces expectations the Fed will keep rates elevated for longer.
• Softer U.S. growth: Revised Q1 GDP data pointed to weaker economic momentum, adding to worries about global energy demand.

Oil prices edged lower during Asian trading on Friday and were headed for weekly declines as investors weighed the prospects of a U.S.-Iran agreement and reports that both sides were close to extending a fragile ceasefire.

As of 21:55 ET (01:55 GMT), Brent oil futures expiring in July eased 0.5% to $93.24 per barrel, while West Texas Intermediate (WTI) crude futures fell 0.9% to $88.17 per barrel.

Both benchmarks were on track to post losses of nearly 10% for the week — marking their sharpest weekly declines in months.

Ceasefire Extension Lifts Sentiment

Market sentiment improved after reports emerged that Washington and Tehran had reached a draft agreement to extend their ceasefire for 60 days while negotiations continue over Iran’s nuclear program and regional security issues.

The proposed agreement still requires approval from U.S. President Donald Trump.

The prospect of a peace deal has reduced concerns over immediate supply shortages and supported expectations that shipping activity through the Strait of Hormuz could gradually normalize.

Traffic through the strategic waterway, however, remains well below pre-conflict levels — keeping a geopolitical risk premium embedded in oil markets.

Volatility Remains Elevated

Oil prices have remained highly volatile in recent sessions as markets reacted to conflicting headlines surrounding ceasefire negotiations. Crude briefly rebounded on Thursday after reports of fresh military exchanges between U.S. and Iranian forces, though gains faded later as diplomatic optimism resurfaced.

Macro Backdrop Adds to Headwinds

Investors were also assessing the broader macroeconomic backdrop after U.S. inflation data showed price pressures remained elevated. Higher-than-expected personal consumption expenditures inflation reinforced expectations that the Federal Reserve may keep interest rates higher for longer.

At the same time, revised U.S. economic growth data pointed to softer momentum in the first quarter, adding to worries about the outlook for global energy demand.