Key Takeaways

• Brent and WTI tumble: Brent oil futures plunged 8.1% to $101.02 per barrel, while WTI crashed 9.2% to $92.93.
• Building selloff: Both contracts had already settled nearly 4% lower in the previous session before Wednesday’s accelerated decline.
• One-page deal in works: The White House is nearing a memorandum of understanding with Iran to end the war and frame broader nuclear talks.
• 48-hour deadline: Washington expects Iran’s response on several key issues within two days.
• Closest yet: Officials describe this as the closest the two sides have come to a deal since the conflict began.
• Deal framework: Iran would commit to a nuclear enrichment moratorium; the U.S. would lift sanctions, release frozen funds, and ease Hormuz restrictions.
• Project Freedom paused: Trump halted the Hormuz operation, though the U.S. naval blockade remains in full force.
• Market vulnerability flagged: ING analysts warn that 13 mb/d of disrupted supply has been offset by rapidly declining inventories.
• Inventory shock: API data showed U.S. crude stocks plunged 8.1 million barrels last week — far above expectations.
• Distillates and gasoline drop: Gasoline stocks fell 6.1 million barrels, while distillate inventories declined 4.6 million barrels.
• EIA data ahead: The more widely followed government inventory report is due later Wednesday.

Oil prices extended losses on Wednesday after Axios reported that the United States and Iran are closing in on a one-page war deal.

As of 06:11 ET (10:11 GMT), Brent oil futures expiring in July fell 8.1% to $101.02 per barrel, while West Texas Intermediate (WTI) crude futures slipped 9.2% to $92.93 per barrel. Oil prices were already trading lower at the start of the day, before the Axios report triggered another sharp leg down.

Both contracts settled nearly 4% lower in the previous session.

White House Pushes Toward Framework Deal with Iran

The White House is nearing a potential agreement with Iran on a one-page memorandum of understanding to end the conflict and establish a framework for broader nuclear negotiations, according to an Axios report citing multiple U.S. officials and sources familiar with the talks.

The report said Washington expects responses from Tehran on several key issues within the next 48 hours. While no final agreement has been reached, officials described the current stage as the closest the two sides have come to a deal since the conflict began.

The proposed framework includes a commitment by Iran to a moratorium on nuclear enrichment, alongside U.S. steps to lift sanctions and release billions of dollars in frozen Iranian funds. The arrangement would also see both sides ease restrictions on transit through the Strait of Hormuz, a critical chokepoint for global energy flows.

Trump Says U.S. Will Pause Hormuz Operation, Blockade Remains

U.S. President Donald Trump said on Tuesday that Washington would pause an operation aimed at restoring commercial shipping through the Strait of Hormuz, raising hopes for a diplomatic breakthrough with Iran.

“We have mutually agreed that, while the Blockade will remain in full force and effect, Project Freedom (The Movement of Ships through the Strait of Hormuz) will be paused for a short period of time to see whether or not the Agreement can be finalized and signed,” Trump wrote in a social media post.

The pause follows heightened tensions earlier this week, when Trump’s “Project Freedom” initiative to secure maritime traffic through the strait triggered a military response from Iran.

“A deal that normalises oil flows through the Strait of Hormuz is crucial,” ING analysts said in a note.

“Roughly 13 mb/d of disrupted supply is being largely offset by inventory, which is clearly declining rapidly. This leaves the market more vulnerable with each passing day. Tighter stocks will only leave the oil market trading in an ever more volatile manner,” they added.

U.S. Crude Stocks Decline Sharply — API

Limiting the downside, however, were signs of tightening U.S. supply. Data from the American Petroleum Institute showed crude inventories fell by 8.1 million barrels in the latest week — a much larger-than-expected draw.

Gasoline and distillate stocks fell by 6.1 million barrels and 4.6 million barrels, respectively.

The more widely followed Energy Information Administration (EIA) inventory data will be released later on Wednesday.