Oil steadies as market awaits possible US-Iran ceasefire deal

File photo: A drone view of a pump jack and drilling rig south of Midland, Texas, USon 11 June 2025. Reuters/Eli Hartman/File Photo

Brent crude futures for July were down 34c, or 0.3%, at $94.05 a barrel by 0810 GMT. US oil futures were steady at $88.89. Both had fallen more than 1% earlier in the session.

Brent has plunged by about 9% this week for its steepest weekly decline since the week to 6 April. WTI, meanwhile, has dropped by nearly 8% for its biggest weekly loss since the week to 13 April.

"While oil flows through the Strait of Hormuz remain restricted and oil inventories keep falling, the market focus remains on the possibility of a deal between the US and Iran," said UBS analyst Giovanni Staunovo.

The US and Iran reached an agreement on Thursday, 28 May, to extend a ceasefire and lift restrictions on shipping through the Strait of Hormuz, sources told Reuters, though US President Donald Trump has yet to approve it and Iranian state media said it had not been finalised.

Prices have been volatile in recent sessions, swinging by as much as $6 for both benchmarks on conflicting signals over a possible end to the Iran war and potential reopening of the Strait of Hormuz, which was previously a conduit for a fifth of the world's oil and liquefied natural gas supplies.

Traffic through the maritime chokepoint remains a small fraction of levels before the conflict. Analysts at ING said a reopening of the waterway would offer some immediate relief to the oil market, but a recovery is still uncertain.

Japan, which relies heavily on oil from the Middle East, last month registered a 66% drop in crude oil imports compared with April last year.

US crude, gasoline and distillate stockpiles fell last week, the Energy Information Administration said on Thursday, as demand from refiners and consumers rose and exports fell by 1.16 million bpd to 4.4 million bpd. [EIA/S]