(RTTNews) – After four consecutive sessions of gains, crude oil slumped on Friday as the prospects of a peace deal between U.S. and Iran gather steam, lowering Middle East tensions.
WTI Crude Oil for June month delivery was last seen trading down by $1.68 (or 1.75%) at $94.17 per barrel.
Oil traders continued to track the developments in the Middle East, awaiting any breakthrough news that could hint at the reopening of the Strait of Hormuz.
Since the war between the U.S.-Israeli forces against Iran started on February 28, Iran has blocked the Strait of Hormuz, stopping all vessels carrying oil and energy from Arab nations to their destinations, triggering an energy crisis.
On April 8, U.S. President Donald Trump announced a two-week ceasefire on U.S. attacks against Iran and sent his emissaries for peace talks with Iranian counterparts, hosted by Pakistan in Islamabad.
The negotiations were deemed “a failure” by Trump, who ordered U.S. forces to completely block ship traffic from and to Iranian ports.
Iran was exporting around 1.80 million barrels per day during March, before the blockade. Nearly 10% of Iran’s GDP comes from its oil exports.
Persuaded by Arab and Muslim nations, Trump agreed to a second round of peace talks, set to happen earlier this week. However, it did not take off as planned since Iran refused to participate unless the U.S. withdraws the blockade on Iranian ports.
With the ceasefire about to end on April 22, even as the U.S. was preparing to intensify attacks on Iran, Trump agreed (at the request of Pakistan) to extend the ceasefire to allow time for the Iranian regime to come up with a peace plan.
Today, Iran’s state-run news media IRNA confirmed a Reuters report that Iran’s Foreign Minister Abbas Araghchi will travel to Pakistan and is scheduled to convey to Pakistani mediators Iran’s concerns and demands
Araghchi himself mentioned through X that his trip is focused on bilateral matters and regional developments though he did not give much detail.
As reported by CNN, U.S. Special Envoy Steve Witkoff and Trump’s son-in-law Jared Kushner will likely represent the U.S though U.S. Vice President JD Vance will step in if needed.
Separately, Trump also announced the extension of the ongoing ceasefire between Israel and Lebanon for three more weeks, which further brought down the gulf war heat.
However, tensions still remain after the U.S. military confirmed aircraft carrier USS George HW Bush arriving in the Middle East, packed with war planes.
While USS Gerald R. Ford is anchoring in the Red Sea, USS Abraham Lincoln is already in the region.
The day before yesterday, Trump ordered U.S. naval forces to destroy any Iranian-linked ship or boat arriving in the Strait of Hormuz region and suspected of laying sea mines.
Today, U.S. Secretary of War Pete Hegseth stated that Iran still has an open window to strike a deal with the U.S. but warned that “clock is not on their side” and urged them to speed up the process.
Yesterday, in an interview with CNBC, the Executive Director of the International Energy Agency Fatih Birol stated that the closure of the Hormuz Strait has evolved into the largest energy crisis the world has ever faced.
The double-blockade enforced in the Strait of Hormuz by the U.S. and Iran has kept oil and energy prices at exorbitant levels.
Barring Saudi Arabia and the United Arab Emirates, which have a few alternate ways for their exports, Bahrain, Iran, Iraq, Kuwait, and Qatar are completely reliant on Hormuz strait with a majority of their exports destined to be delivered to China, India, and Japan.
The U.S. Dollar Index was last seen trading down by 0.26 points (or 0.26%) at $98.56.
Traders are watching how the negotiations evolve over the weekend, and experts feel that the outcome of the talks could direct crude oil prices in the coming days.
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