Iran's state media published a draft agreement that would reopen the vital shipping lane within 30 days of a final deal being signed
Photo: Morteza Nikoubazl (Getty)
Oil prices fell Friday after Iran's semiofficial Mehr News Agency published details of a draft peace agreement between the U.S. and Iran that would reopen the Strait of Hormuz, according to MarketWatch. July delivery WTI crude shed 2.5% to reach $85.47 a barrel, and the August Brent contract settled 2.2% lower at $88.40 a barrel.
According to CNBC, the draft agreement calls on the U.S. to lift oil sanctions while Iran would be required to reopen the strait no later than 30 days after a final deal takes effect. Iran's Mehr News Agency said the 14-point document sets preconditions for the start of any final negotiations, among them a partial unfreezing of Iranian funds, an end to oil sanctions, and removal of the naval blockade.
Geneva has emerged as a possible venue for an agreement to be formalized this weekend. The timing would place the signing near the G7 summit, scheduled for June 15 through June 17 in the French Alpine town of Evian. Trump has signaled that JD Vance and Steve Witkoff would attend any signing ceremony on his behalf, according to Bloomberg.
On Thursday, Trump told reporters from the Oval Office that the strait would become accessible the moment an agreement is finalized, and said he had discussed the emerging deal with Netanyahu and other leaders in the region. A statement from Netanyahu's office acknowledged the call while clarifying that Israel has no seat at the negotiating table; it noted that the prime minister welcomed Trump's assurances that any concluded agreement would place limits on Iran's nuclear program.
Iran's foreign ministry signaled caution on Friday. A foreign ministry spokesman told reporters Friday that Tehran had not finalized anything, even as the state news agency IRNA separately quoted a ministry spokesperson saying the draft text was close to complete and awaiting sign-off from Iran's top decision-makers. A European official with knowledge of the talks said that Supreme Leader Mojtaba Khamenei has yet to give his blessing to the memorandum.
The Strait of Hormuz carries roughly one-fifth of the world's seaborne oil and liquefied natural gas, and Iran has all but closed it since hostilities erupted, driving energy prices higher across global markets. Despite being roughly 45% above where it started the year, Brent has pulled back considerably from the $125 peak it hit in late April, with traders having priced in the possibility of a diplomatic outcome rather than a return to full-scale conflict.
Equity markets diverged sharply from crude on Friday, as anticipation of a peace agreement lifted European bourses broadly higher.
Join 500,000+ readers who start their day with Quartz.
By subscribing, you agree to our Terms of Service and Privacy Policy.
