WTI crude falls 6.75% to $89.55 after US hints at potential deal easing Middle East tensions and supply risks.
Crude oil prices retreated after President Donald Trump indicated negotiations with Iran were advancing, suggesting a possible easing of geopolitical tensions in the Middle East. The remarks raised expectations of reduced supply disruptions in the Strait of Hormuz, a critical chokepoint for global oil shipments.
Prior to the announcement, WTI crude had traded higher amid concerns over restricted passage through the strait and frozen Iranian funds. Analysts had warned of upward pressure on prices if tensions escalated further, though no formal agreement has been finalized.
Markets reacted swiftly, with WTI crude down 6.75% to $89.55 at the time of reporting. The decline reflects investor sentiment that a deal could alleviate supply constraints and reduce risk premiums in oil markets.