Oil tumbles as Trump signals US drawing closer to deal with Iran

[NEW YORK] Oil plunged to the lowest since April as US President Donald Trump said that a peace deal with Iran could be signed as soon as the weekend, fuelling bets for an end to the war that’s disrupted global energy shipments.

Brent crude, the global benchmark, dropped 2.9 per cent to settle near US$90 a barrel. Prices extended declines in post-settlement trading as Trump said at the White House that the US “just made a great settlement of the war with Iran”, adding that a signing could take place as soon as this weekend in Europe with Vice-President JD Vance in attendance.

Trump’s latest comments came hours after he posted on social media that the US would pull back from threatened military strikes against Iran.

There’s still no official word from Iran. Earlier, Iran’s semi-official Fars reported Thursday that Teheran has not yet approved any text for an agreement with the US, citing a source familiar with the negotiations.

The Strait of Hormuz was the chokepoint for about a fifth of the world’s seaborne oil cargoes before the conflict led to a near-halt in shipping out of the Persian Gulf.

Oil prices had slid earlier after Trump said in a social media post that he “cancelled the scheduled strikes”, walking back earlier threats to seize the Kharg Island oil terminal that is vital for Teheran’s exports.

His comments marked the latest in a series of conflicting messages from Washington about the status of negotiations, which has often flipped between threatening Iran to touting a peace deal, sometimes within a matter of hours.

The back-and-forth messages from the Trump administration have been “constraining oil traders’ ability to confidently deploy risk in the market”, said Frank Monkam, head of cross asset macro strategy and trading at Buffalo Bayou Commodities.

“However, this strategy is at risk of decaying the closer we get to full inventory depletion,” he added.

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Oil rises more than US$1 as escalation in US-Iran strikes unnerve traders

Oil prices are down by more than a quarter from their Iran-conflict peak, even as a lasting peace deal has remained elusive. Investors have navigated extreme volatility in recent months as protracted negotiations between the US and Iran yielded little progress towards reopening the Strait of Hormuz.

In recent sessions, crude trading remained subdued with many dealers forced to dial back risk exposure. Open interest in Brent fell to its lowest level since March 2025, a sign that investors were being forced to the sidelines

Traders also attribute the recent price slide to ample workarounds that have helped to keep global oil supplies from cratering. A growing number of oil tankers are moving through the Strait of Hormuz, boosting the flow from a trickle to a stream. Trump said on Wednesday that more than 100 million barrels have now crossed the waterway since a secret US mission began supporting maritime trade in the region.

Earlier on Thursday, the United Arab Emirates and Iran met face-to-face for the first time since the start of the US-Israeli war against Teheran, Bloomberg reported, citing sources familiar. A dialogue between the longtime regional rival signals a growing push among Gulf states to end the conflict through diplomacy.

Still, there are signs that in parts of the world global oil inventories are drawing dramatically, underscoring that not all of the market’s workarounds can last.

In the US, crude stockpiles, including strategic reserves, dropped by 15 million barrels last week. They are down by more than 70 million barrels over the last five weeks, a decline of more than two million barrels a day that’s the biggest in data since the 1980s. Fuel inventories in Singapore are also at the lowest level since 2013. BLOOMBERG