Oil prices retreat amid hopes for a US-Iran agreement

Oil prices pulled back from Thursday’s session highs as investor hopes grew that the United States and Iran could reach an agreement preventing a return to war.

US crude oil rose 16 cents to $98.42 per barrel by 1:30 p.m. Eastern Time, while global benchmark Brent crude fell 31 cents to $104.71 per barrel.

Prices had surged more than 3% earlier in the session after Reuters reported that Iran’s Supreme Leader Ayatollah Mojtaba Khamenei issued a directive ordering enriched uranium to remain inside Iran.

Markets viewed Khamenei’s position as a potential complication for negotiations with the United States, especially as US President Donald Trump has repeatedly stated that dismantling Iran’s nuclear program remains a primary objective of Washington’s war effort.

Trump said earlier this week that he canceled imminent airstrikes against Iran to give diplomacy more time, following requests from US allies in the Arabian Gulf region. Tehran and Washington have made little significant progress toward an agreement since reaching a fragile ceasefire last month.

Trump also warned on Wednesday that military operations could resume if Iran failed to provide “100% good answers” during negotiations, although he said he was willing to wait a few more days to allow talks to continue.

Speaking to reporters at Joint Base Andrews in Maryland, Trump said regarding potential US military action:

“We are fully prepared. We need the right answers, and they need to be 100% good answers.”

He added: “If I can prevent war by waiting a few days, and if I can save lives by waiting a little longer, I think that’s a great thing.”

Meanwhile, shipping traffic through the Strait of Hormuz continues facing severe disruptions due to Iran’s blockade of the waterway, which remains a vital route for global oil supplies.

The International Energy Agency warned on Thursday that the oil market could enter the “red zone” this summer if the Strait of Hormuz is not reopened. Executive Director Fatih Birol said global oil inventories are expected to decline as demand rises during the summer travel season.