The United States and Iran reached a preliminary agreement on Friday to extend their ceasefire for 60 days. This tentative deal awaits final approval from President Trump. The agreement includes plans to reopen the Strait of Hormuz to unrestricted shipping. This waterway handles approximately 20% of global oil consumption.
Brent crude futures fell 2% following the announcement. Prices dropped to between $91 and $92 per barrel. This represents the lowest price level in six weeks. Oil is now on track for its largest monthly decline since 2020.
The de-escalation reduces supply risks that previously kept energy prices elevated. The agreement also establishes a framework for further negotiations regarding Iran's nuclear program.