Oil Prices Dip Amidst Uncertain US-Iran Deal on Strait of Hormuz

Oil prices fell Friday as the U.S. and Iran neared an agreement to reopen the Strait of Hormuz, though a senior Trump administration official said the outcome still was not certain.

U.S. crude oil futures fell 3.2% to close at $84.88 per barrel. Brent futures, the international benchmark, lost 3.4% to settle at $87.33. Prices lost about 6% this week though they are still up more than 20% since the U.S. and Israel attacked Iran on Feb. 28.

The Trump administration official said they see an 80% chance that the U.S. and Iran will sign an agreement in the coming days.

"It's not 100%," the official said. "Their system is very complicated. Most of the people that we've been speaking to and most of the people who have authority within their system want to sign this deal, but not everybody."

The deal would reopen Hormuz, lift the U.S. naval blockade, dismantle Iran's nuclear program and remove its enriched uranium, the official said. Iran would receive financial incentives if they comply with the agreement, the official said.

The agreement outlined by the Trump administration contradicted a document released earlier Friday by Iranian state news agency Mehr that seemed more favorable to Tehran.

The Iranian document said the U.S. would agree to withdraw its forces from around the Islamic Republic, lift its naval blockade in 30 days, and provide $300 billion in reconstruction money. Iran would reopen Hormuz in 30 days but under arrangements set by Tehran.

The Trump official said Iranian hardliners were trying to make the deal look more favorable to Tehran to satisfy their domestic constituencies. President Donald Trump categorically denied the Iranian text represented the agreement reached between Washington and Tehran.

"The terms that Iran leaked out to the Fake News have NOTHING to do with the terms that were agreed to, in writing," Trump said in a Truth Social post.

Trump disparaged the Iranians as "very dishonorable people to deal with" who do not negotiate in good faith. He accused Iran of launching a drone at an Indian vessel overnight, denouncing the attack as unacceptable.

"They better get their act together, and FAST!" the president said.

Pakistan Prime Minister Shehbaz Sharif, who has mediated U.S.-Iran talks, said an "incessant misinformation campaign" was being "waged by those who want to sabotage a peace deal."

"Setting aside the noise, we can confirm that a final, agreed upon text of the peace deal has been reached and Pakistan is now working closely with both sides to finalize the next steps," Sharif said.

"Peace has never been this close as it is now," the prime minister said.

Shortly after Trump denied the Iranian report, Iran's Foreign Minister Seyed Abbas Araghchi said in a social post that a memorandum of understanding between the U.S. and Iran "has never been closer."

"Pending its finalization, the media should refrain from entering speculation about its content," Araghchi said. "In line with our responsible and transparent approach, all details will be shared with the public in due course."

Trump then reposted Araghchi's social media post.

U.S. Vice President JD Vance said fake information was circulating about a deal to reopen Hormuz and end Iran's nuclear program. Vance said Tehran will not receive any cash and funds will not be released just for signing a deal or attending a meeting.

"The deal is structured to ensure that the US and its allies concerns are prioritized, and that if the Islamic Republic of Iran meets its obligations, then economic benefits will flow to them and to the entire region," the vice president said in a social media post.