Oil prices decline amid expectations of a U.S.-Iran peace agreement

Oil prices fell nearly 2% on Friday amid growing hopes of easing tensions after U.S. President Donald Trump canceled planned military strikes against Iran, AzerNEWS reports.

The price of Brent crude oil dropped by $1.83 (2%) to $88.55 per barrel, while WTI crude fell by $1.60 (1.8%) to $86.11 per barrel.

Donald Trump stated that progress had been made in negotiations with Iran and that a peace agreement, which would include reopening the Strait of Hormuz to shipping, could be signed as early as this weekend. However, Iranian officials said they had not approved any draft agreement.

Despite this, the situation remains tense. Iran announced that it had closed the Strait of Hormuz and reported stopping a tanker that attempted to pass through without coordination.

Analysts at ING warned that any ceasefire could be fragile and that tensions could rise again if nuclear negotiations fail. In their view, if oil flows are not restored by the end of July, prices could climb to $120–130 per barrel.

Meanwhile, OPEC+ has lowered its forecast for global oil demand growth in 2026.