Oil prices fell Friday after reports surfaced that the United States and Iran were making progress toward a peace deal that could lift sanctions on Iranian oil exports, according to MarketWatch.
West Texas Intermediate and Brent crude both declined on the news. A potential agreement would reopen the Strait of Hormuz, a critical chokepoint for global oil shipments, to Iranian exports that have been blocked by sanctions.
Iran holds some of the largest proven oil reserves in the world. If sanctions were lifted and Iranian crude returned to global markets in volume, the added supply would put downward pressure on prices. Traders moved on that expectation Friday as reports of deal progress emerged.
The Strait of Hormuz sits between Iran and the Arabian Peninsula and is the passage through which roughly 20% of global oil trade flows. Any disruption to that route, or any change in the access of major producers to it, carries immediate consequences for energy prices worldwide.
No final agreement had been announced as of Friday, and oil markets remained in motion as investors weighed the likelihood of a deal being completed.
