OIL FALLS ON IRAN DEAL REPORT AS HORMUZ RISKS REMAIN

Oil prices fell sharply Wednesday after Iranian state television reported that Tehran had seen a draft framework for a possible agreement with the United States to end hostilities and reopen the Strait of Hormuz. Reuters reported that Brent crude fell 3.7% to $95.92 a barrel, while U.S. West Texas Intermediate dropped 5.59% to $88.70, reaching the lowest levels in more than a month.

The market reaction was driven by hopes that shipping through the Strait of Hormuz could return closer to normal if a deal is reached. Reuters reported that Iranian state TV said commercial shipping could be restored to pre-war levels within a month under a possible framework, which would include lifting the U.S. naval blockade on Iranian shipping and managing traffic through the strait with Oman.

The report remains disputed. Reuters said the White House dismissed the Iranian state TV account as a “complete fabrication,” while U.S.-Iran talks continued over military de-escalation, Hormuz access, sanctions, frozen Iranian assets, and the future of Iran’s nuclear program. That makes Wednesday’s oil drop a market reaction to possible progress, not confirmation that a deal has been reached.

Hormuz remains the central issue because the waterway is one of the world’s most important energy routes. Reuters reported that the war and shipping restrictions have disrupted global oil supplies, while the International Energy Agency has estimated that the conflict has affected more than 14 million barrels per day of Middle East oil exports.

The price move also followed signs of limited shipping improvement. Reuters reported that a pickup in tanker traffic through the strait helped outweigh earlier concerns from U.S. strikes, Iranian ceasefire-violation claims, and a tanker reporting an explosion off Oman. Those mixed signals show why traders are reacting quickly to each new report from Tehran, Washington, shipping monitors, and energy markets.

Markets beyond oil also reflected cautious optimism. Reuters reported that U.S. stocks held near record highs as investors weighed possible U.S.-Iran peace progress, while Treasury yields eased slightly amid reduced inflation concerns. The same report said Brent and WTI fell as fears of supply disruption eased, even though the White House denied the draft-deal report.

The immediate question is whether the reported framework becomes a real agreement or another false start. A political announcement alone would not instantly normalize shipping if mine-clearing, naval access, insurance confidence, and verification still need to be resolved. Until U.S. and Iranian officials confirm terms, Hormuz remains a risk point even as oil markets price in the possibility of relief.

Fact-check date: 27 May 2026
Sources: Reuters, Iranian state TV reporting via Reuters

[IMG]https://vepbrgvfdbpwzesrqysv.supabase.co/storage/v1/object/public/article-images/1779899822695-0kyxkw98xwq.png||Mission Offline Desk[/IMG]