WTI crude oil futures fell 1.1% to below $88 per barrel on Friday, the lowest level in roughly six weeks, leaving prices down 16.2% for May. The decline followed reports that the United States and Iran have reached a preliminary understanding to extend a ceasefire and ease restrictions on shipping through the Strait of Hormuz. However, President Donald Trump has not yet approved the deal, and Iranian state media reported that it has not been finalized.
The prospective agreement has fueled expectations of an eventual end to the US-Israeli conflict involving Iran and a reopening of the Strait of Hormuz, a vital corridor for about one-fifth of global crude oil and LNG trade. Still, analysts caution that any recovery in flows is likely to be gradual. They note that mines must be cleared, damaged infrastructure repaired, and shut-in production restarted, while tanker backlogs and delays could further slow the full restoration of supply.
