Crude Oil Prices Fall As US-Iran Ceasefire Extension Proposal Eases Supply Concerns

Global crude oil prices slipped more than 1 per cent in early trade on Friday following reports that the United States and Iran had agreed on a proposed 60-day memorandum of understanding to extend the ongoing ceasefire.

At around 11:15 AM, international benchmark Brent crude fell 1.12 per cent to trade at $92.66 per barrel, while US West Texas Intermediate (WTI) crude declined 1.18 per cent to $87.86 per barrel.

According to reports quoting US officials, the proposed agreement would ensure uninterrupted commercial shipping through the strategically important Strait of Hormuz, one of the world’s busiest oil trade routes.

The memorandum is also expected to require Iran to remove sea mines within 30 days and stop collecting tolls from vessels passing through the strait.

Officials further indicated that the United States could gradually lift its naval blockade in proportion to the restoration of commercial shipping operations.

Reports stated that US President Donald Trump has not yet given final approval to the agreement, while Iran has also not officially confirmed its acceptance.

Oil markets witnessed sharp volatility on Thursday after prices surged following reports of US strikes on a military site in Bandar Abbas.

Investors continue to closely monitor developments surrounding the Strait of Hormuz, which handles nearly one-fifth of global oil and liquefied natural gas trade.

The Petroleum Ministry said state-run oil companies were absorbing heavy losses to shield consumers from rising crude prices, while fuel supplies remained stable despite panic buying in some areas.

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