Oil prices fall after report of breakthrough in US-Iran talks

Oil prices fell after reports that the United States and Iran had reached a deal in principle, pending final approval from President Donald Trump. The move came as traders reacted to signs of progress in ceasefire-extension talks linked to the conflict that has disrupted shipping through the Strait of Hormuz. Brent crude, the global benchmark, dropped to a low of $93.36 a barrel from an earlier high of $98 before recovering to about $95.

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According to the report, officials had agreed an extended ceasefire and a 60-day pause to allow talks on Iran's nuclear programme to begin. The reported arrangement still requires Trump's approval, and he has said he wants a few days to make a final decision. The price fall followed a period of sharp swings in the oil market, with prices having risen earlier after new US strikes on Iran.

The latest attacks targeted a military site in Bandar Abbas, a strategic port city in southern Iran. The US said the strikes were carried out in self-defence, while the US Central Command said its forces also shot down four Iranian drones that posed a threat around the Strait of Hormuz. It also said earlier strikes had targeted Iranian missile sites and boats attempting to lay mines in the waterway.

Iran described the new attacks as a grave violation of the ceasefire and said it would not leave any act of hostility unanswered. The developments matter because the Strait of Hormuz is one of the world's most important energy routes, with around a fifth of global oil and liquefied natural gas supplies usually passing through it. The conflict has already pushed global energy costs higher and made oil prices unusually volatile.

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Brent crude briefly surged to around $120 a barrel after the war began, compared with about $70 before the conflict. The market reaction also reflects hopes that a deal could reopen the strait and reduce the risk to shipping. The report said the ceasefire extension would be tied to talks on Iran's nuclear programme, adding a wider diplomatic dimension to the military confrontation.

Kuwait's military said on Thursday that it was intercepting hostile missile and drone threats, underlining the regional spread of the tensions. What remains unclear is whether Trump will approve the reported agreement and whether the ceasefire can hold long enough for negotiations to begin. It is also not yet clear how the latest strikes will affect the wider talks or the security of shipping in and around the Strait of Hormuz.

Traders will be watching for any further official statements from Washington and Tehran, as well as fresh signs of disruption to energy flows.

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