Oil prices hit 2-month low on hopes of US-Iran deal

Oil prices hit 2-month low on hopes of US-Iran deal

Oil prices have plummeted to a two-month low, following US President Donald Trump's announcement of a potential peace deal with Iran.

The news has sparked hopes of renewed energy flows through the strategically important Strait of Hormuz.

West Texas Intermediate (WTI) crude, the US benchmark for oil prices, fell nearly 3% at the open to $85.13 per barrel—its lowest since April 17.

Possible breakthrough in talks with Tehran

Trump's comments came as he hinted at a possible breakthrough in talks with Tehran, despite continued military action and no official confirmation from Iranian officials.

He said a deal could be signed in Europe this weekend, with Vice President JD Vance possibly attending.

The proposed agreement would reopen shipping through the Strait of Hormuz and include commitments from Tehran not to pursue nuclear weapons.

Iranian officials play down possibility of imminent deal

However, Iranian officials have played down the possibility of an imminent deal.

Iran's semi-official Fars news agency reported that Tehran has not yet approved any final text for an agreement with the United States.

This uncertainty comes after US forces conducted a second consecutive day of strikes against Iranian targets early Thursday.

Importance of Strait of Hormuz

The ongoing war in the Middle East has severely disrupted global energy markets, nearly closing the Strait of Hormuz—one of the world's most important energy chokepoints.

The waterway is critical for a large portion of global crude oil, fuel, and liquefied natural gas shipments. Disruptions here have raised concerns about supply stability.