Oil Prices Slide as Iran Signals Hormuz Shipping Recovery Within One Month

Oil prices moved sharply lower on Wednesday after Iran stated that a potential peace agreement with the United States could restore commercial shipping through the Strait of Hormuz to pre-war levels within a month.

The prospect of improved oil flows through one of the world’s most important energy trade routes added pressure to crude markets, while ongoing ship movement through the strait under Iranian naval supervision also weighed on prices.

By 13:49 ET (17:49 GMT), Brent crude futures for July delivery had fallen 4.4% to $95.15 per barrel, while U.S. West Texas Intermediate (WTI) crude dropped 4.6% to $89.60 per barrel.

Technical Analysts Warn of Further Downside

Market analysts noted that oil prices are showing increasing technical weakness following the recent decline.

Adam Turnquist, chief technical strategist at LPL Financial, said Brent crude recently broke below key support near its 50-day moving average. According to Turnquist, a sustained move below the $96 level could open the door for additional declines toward $92.50, $90, and potentially even $86 per barrel.

He also pointed to weakening momentum indicators, including a bearish divergence in the Percent Price Oscillator (PPO), which suggests buying pressure may be fading in the near term.

White House Rejects Iranian Peace Deal Reports

Several media outlets, including Reuters and Fox News, reported that Iran had received a draft memorandum of understanding aimed at ending hostilities with the United States. The proposed framework reportedly included restoring commercial shipping through the Strait of Hormuz and lifting the U.S. naval blockade around Iranian ports.

However, the White House quickly denied the claims.

An official statement from the administration’s Rapid Response 47 account described the reports as false and called the alleged memorandum “a complete fabrication.”

Donald Trump Says Negotiations Continue

Earlier in the week, President Donald Trump said a memorandum of understanding had been “largely negotiated” following discussions with regional leaders, raising hopes for a possible resolution to the conflict.

However, tensions escalated again after the U.S. military carried out what it described as defensive strikes on Iran, prompting retaliation from Tehran. Despite the renewed exchange of fire, indirect negotiations between both sides reportedly continue.

Trump later stated that Iran remains eager to secure a deal, although he stressed that negotiations had not yet reached a satisfactory outcome.

Strait of Hormuz Remains Critical for Global Energy Markets

The Strait of Hormuz is one of the world’s most strategically important waterways, handling roughly one-fifth of global oil and gas shipments.

The disruption of shipping through the strait has created one of the largest supply shocks in modern history, driving oil prices sharply higher and increasing global inflation concerns.

Higher energy prices have also fueled expectations that central banks could maintain elevated interest rates for longer, putting additional pressure on bond markets and global economic growth.

Oil Prices Continue to Influence Global Bond Markets

Deutsche Bank analyst Jim Reid noted that government bond yields have recently moved closely alongside oil prices, highlighting the strong relationship between energy markets and inflation expectations.

According to Reid, the recent decline in oil prices has helped support a recovery in bond markets, as traders reassess the inflation outlook amid easing energy concerns.

Trump Predicts Lower Gasoline Prices Ahead

President Trump also said he expects gasoline prices in the United States to eventually fall below pre-war levels once the Strait of Hormuz fully reopens.

According to AAA data, the current national average gasoline price stands at $4.459 per gallon, compared to $3.174 a year earlier.

Trump additionally highlighted rising demand for U.S. energy exports, stating that large numbers of vessels are heading toward Texas, Louisiana and Alaska to purchase American oil supplies.