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Oil prices tumbled sharply on Thursday as traders reacted to fresh signals that a nuclear agreement between the United States and Iran could be imminent—raising the potential for a substantial boost in global crude supply.
As of 04:05 ET (08:05 GMT), Brent crude futures fell 3.1% to $64.06 per barrel, while West Texas Intermediate (WTI) crude futures dropped 3.3% to $61.06 per barrel. The losses build on Wednesday’s decline, which ended a four-day rally and pulled prices away from recent two-week highs.
Trump: U.S.-Iran Nuclear Deal “Very Close”
Market sentiment was jolted after U.S. President Donald Trump said Thursday that Washington was “very close” to reaching a nuclear deal with Iran, and that Tehran had “sort of” agreed to the terms. While no formal agreement has been signed, the comments marked a significant softening in rhetoric and fueled speculation that sanctions relief could soon allow more Iranian oil to enter the global market.
Ongoing negotiations between Iranian and U.S. officials concluded on Sunday, with plans to resume talks. Though both parties have been divided on key issues—particularly Iran’s uranium enrichment activities—Trump’s remarks suggest a possible breakthrough.
If finalized, the deal could unlock Iranian crude exports, which have been heavily curtailed since U.S. sanctions were reinstated in 2018. Prior to sanctions, Iran produced around 3.8 million barrels per day, compared to the estimated 1.6 million bpd currently being exported under sanctions through indirect channels.
Supply Concerns Mount
An Iranian oil comeback would shift the delicate supply-demand balance in global markets, especially at a time when inventories are unexpectedly building and demand forecasts are softening.
The U.S. Energy Information Administration (EIA) reported on Wednesday that commercial crude stocks rose by 3.5 million barrels last week, bringing total inventories to 441.8 million barrels. Analysts had anticipated a drawdown of 2 million barrels. Industry data from the American Petroleum Institute (API) earlier this week similarly showed a 4.3 million-barrel build, compounding bearish sentiment.
IEA Cuts Global Demand Outlook
Further pressuring oil prices, the International Energy Agency (IEA) slashed its global oil demand growth forecast for the remainder of 2025 to 650,000 barrels per day, down from the 990,000 bpd seen in the first quarter.
The IEA attributed the slowdown to economic headwinds and an acceleration in electric vehicle (EV) adoption, particularly in China and Europe.
OPEC+ Production and Market Impact
This comes as OPEC+ producers continue to gradually raise output in line with previous agreements. While the cartel has shown restraint in 2024 and early 2025, a return of Iranian barrels could put pressure on Saudi Arabia and Russia to reassess their supply strategies in order to defend market share.
