Oil prices fell after reports of a tentative US-Iran agreement to extend a ceasefire by 60 days, easing fears that the conflict could disrupt crude supplies through the Strait of Hormuz. The move came as traders reacted to signs that the two sides were close to a broader deal, although the arrangement still appeared to need President Donald Trump’s approval, according to Bloomberg and the BBC.
According to Bloomberg, Brent crude and other global benchmarks dropped as investors bet that a truce could eventually allow more oil to flow from the region. The BBC reported that the fall followed a breakthrough in talks, while Bloomberg said Brent was on track for its biggest monthly decline since 2020 as optimism grew that shipments through the strategic waterway might resume.
The Strait of Hormuz is one of the world’s most important oil chokepoints, and any threat to traffic there tends to push energy prices higher. That is why the prospect of a ceasefire, even a tentative one, quickly rippled through markets, with stocks rising to record levels, gold holding gains and industrial metals also strengthening on reduced fears of inflation and supply disruption, according to Bloomberg’s market coverage.
The reports said the agreement would be temporary and would open the way for a new round of negotiations on Iran’s nuclear program. One Bloomberg report said the ceasefire extension was still subject to Trump’s signoff, and Vice President JD Vance said Thursday that it was unclear whether the president would approve it.
Iran has not immediately confirmed any deal, leaving open the possibility that the market reaction could reverse if talks stall. For now, however, traders are treating the reports as a signal that the risk of an immediate supply shock has eased, which matters not only for oil consumers but also for inflation expectations, transport costs and the broader direction of global markets.
The price drop also reflects the possibility that sanctions could be loosened if a final agreement is reached, potentially allowing Iran to sell more oil. That prospect, combined with a reduction in military tension, has been enough to push crude lower and reinforce expectations that energy markets may be headed for a calmer phase after weeks of uncertainty.
