Oil futures fell more than 1% on Friday and moved toward their steepest weekly decline since early April. Reports that the United States and Iran had agreed to extend a ceasefire pushed crude prices lower. Investors reacted quickly even though the deal had not yet been finalised. The selloff hit both major benchmarks hard across the full trading week.
Brent and WTI Record Heavy Session Losses
Brent crude futures for July fell 1.1% or $1.04 to reach $92.67 a barrel by 0330 GMT. US oil futures dropped $1.26 or 1.4% to settle at $87.64 a barrel. Both benchmarks extended losses from earlier in the week. Traders continued to sell crude as ceasefire optimism built through Friday morning.
Weekly Declines Hit Levels Not Seen Since April
Brent crude plunged 10.5% across the week.
That marked the steepest weekly decline since the week that ended on April 6. West Texas Intermediate fell 9.2% over the same period. That represented the biggest weekly loss for WTI since the week that ended on April 13. The scale of the weekly selloff reflected a dramatic shift in market sentiment.
US-Iran Ceasefire Deal Still Awaits Final Approval
The United States and Iran reached a preliminary agreement on Thursday. The deal covers a ceasefire extension and the lifting of restrictions on shipping through the Strait of Hormuz. Sources provided this information to Reuters directly.
However, US President Donald Trump had not yet approved the agreement as of Friday morning. Iranian state media also confirmed the deal had not been finalised. That uncertainty kept traders cautious even as prices continued to fall.
Analyst Points to Further Downside If Narrative Holds
IG analyst Tony Sycamore shared a clear view on where oil futures are heading. He said consensus among traders is that the conflict is over and a deal is coming. Sycamore added that as long as this narrative holds, crude oil has room to extend its decline.
He pointed to trendline support in the low $80s as the next likely target. His comments reinforced growing market confidence that a formal resolution is near.
Strait of Hormuz Closure Squeezed Global Oil Supply
The Strait of Hormuz sits at the heart of the global oil supply story. The waterway carries roughly a fifth of the world’s oil and liquefied natural gas supplies. Traffic through the chokepoint remained a small fraction of pre-war levels throughout the conflict.
The three-month US-Israeli war on Iran disrupted flows significantly and kept supply tight. Traders priced in a risk premium for months while the strait stayed restricted.
Prices Swung Wildly on Conflicting War Signals
Oil futures had been highly volatile in the sessions leading up to Friday. Both Brent and WTI swung by as much as $6 per barrel on conflicting signals.
Hormuz Reopening Would Help but Full Recovery Takes Time
Analysts at ING said a reopening of the Strait of Hormuz would offer some immediate relief to the oil market. However they warned that a full recovery remains far from certain. ING noted that upstream oil production has fallen significantly since the war began. Producers shut in output to manage storage constraints as export routes stayed closed. The path back to normal production levels will be gradual rather than immediate.
Refinery Damage Slows the Road to Normal Supply
ING analysts flagged another major obstacle to a swift market recovery. Refineries across the region need to ramp up output before supply can return to normal. Some refinery infrastructure suffered direct damage during attacks earlier in the conflict. Bringing those facilities back online requires repairs and careful restarts. The process will take time and adds another layer of uncertainty to the supply outlook.
Oil Futures Watch Washington and Tehran for the Next Move
Oil futures on Friday delivered a clear verdict from the market. Traders sold crude aggressively on the expectation that the Strait of Hormuz would reopen and supply would recover.
The weekly losses told the story of how fast sentiment turned once ceasefire talks gained traction. But the market still needs a signed and confirmed deal before the full picture becomes clear. Until Trump approves and Iran confirms, oil futures remain sensitive to every headline out of both capitals.