Oil Prices Fall Sharply as Trump Says He is Close to US-Iran Peace Deal

Global oil prices fell sharply after US President Donald Trump announced that he was close to signing a peace deal with Iran, reviving hopes for some easing of tensions as energy supplies may return to normal around the region.

It followed reports that Trump had aborted additional military strikes on Iran that were to take place later in the day. Market interpretation had no doubts and, on the signals of negotiations progressing, oil markets collapsed broadly.

Trump Comments Depress Oil

Brent crude, which hovered near $93 a barrel in overnight deals, started falling after those remarks from Trump. WTI, which briefly fell below $85 a barrel globally, had recovered slightly to around $87.50 by later in the day, down around 3%.

Trump told reporters on Friday that negotiations with Iran were "doing really well," and said a peace deal could open trade in the Strait of Hormuz as soon as this weekend. Iran said while a lot of possible deal remains agreed upon, it is not prepared to settle on the proposal yet.

Market sentiment gets a boost from the reopening of Strait of Hormuz

There are speculations that the Strait of Hormuz would reopen contributed to strengthening investor confidence. It is one of key oil and gas shipping lines. Brent crude had earlier hit highs of $113 a barrel earlier in the conflict, when flow of energy through the Gulf were disrupted.

The uptick in prices led members attending an IEA meeting to arrange the release of 400 million barrels from emergency stockpiles of crude to help stabilise global markets. Prior to the outbreak of conflict, prices for Brent crude had been hovering around $70 per barrel.

Other pressuring factors for Oil Market

Though talk of a US-Iran accord was not the only force behind lower prices, analysts said. Global supply and demand conditions have also stabilized with Chinese oil import cuts and new crude export channels opened from the Gulf.

Further, Tamas Varga of PVM Oil Associates said growing belief that a deal might be made and the Strait of Hormuz was due to be reopened was still "shaping mood in the market."

Goldman Sachs maintains $90 Oil forecast for 2026

Goldman Sachs said despite the recent drop in prices, it still expects oil to average some $90 a barrel during the last quarter of 2026 as supply flows partially normalise and countries replenish empty stockpiles. But it reduced its oil price forecast in 2027 by $5 to $80 a barrel, citing: increasing supply from the Americas and the UAE.

Follow Inspirepreneur Magazine for daily global business news.