MW Global oil prices end at 3-month low after Pakistan says a U.S.-Iran peace deal has been reached
By Isabel Wang and Myra P. Saefong
WTI prices have been range-bound since the April 7 cease-fire, with further declines likely requiring a meaningful pickup in Strait of Hormuz traffic
Iran's semiofficial Mehr News Agency reported that a draft peace deal would reopen the Strait of Hormuz.
Oil prices finished lower on Friday, with international benchmark Brent crude settling at its lowest level since the early days of the Iran conflict, after Pakistan said a peace deal between the U.S. and Iran had been reached.
The Brent crude contract for August (BRN00) (BRNQ26) was off by 3.4% to end at $87.33 a barrel, its lowest settlement value since March 5. For the week, the international benchmark was off 6.2% and has fallen in three of the past four weeks, according to Dow Jones Market Data.
The U.S.-traded West Texas Intermediate contract for July delivery (CL.1) (CLN26) was down 3.2% to $84.88 a barrel, its lowest level since April 17. The U.S. benchmark slid 6.3% this week, according to FactSet data.
The moves come after Pakistan Prime Minister Shehbaz Sharif said that the U.S. and Iran had reached "a final, agreed-upon text ?of a ?peace deal," and that Islamabad is now working closely with both sides to finalize the next steps.
"Peace has never been this close as it is now," Sharif said in a post on X. No further details were immediately available.
Remarks from a senior U.S. official on Friday afternoon added to those hopes. The official, who briefed reporters on condition of anonymity, said there is "an 80% or 85%" chance of a deal in the coming days, though those involved in the negotiations are not quite at the finish line yet.
Earlier on Friday, oil prices extended their losses from Thursday's session on a report from Iran's semiofficial Mehr News Agency that a draft peace deal would reopen the Strait of Hormuz and lift oil sanctions on Iran.
On Thursday, U.S. President Donald Trump said he had canceled planned strikes on Iran and that a memorandum of understanding would be signed as early as this weekend, potentially in Europe - with negotiations having been brought "to the highest level of Iranian leadership and approved."
But a spokesperson for Iran's foreign ministry, Esmail Baghaei, reportedly responded that "nothing has been finalized." The Islamic Republic's news agency also reported that shipping through the Strait of Hormuz would not return to preconflict levels.
"Here's a note of caution: Multiple times in the past two months, a breakthrough seemed imminent but the two sides didn't cross the finish line," said Pavel Molchanov, investment-strategy analyst at Raymond James. "But the big picture is that WTI has been range-bound since the April 7 cease-fire: bouncing between the high $80s and low $100s."
Oil's current level should be enough for gasoline at the pump to fall below $4 a gallon by the end of June, Molchanov noted. But for those prices to be sustained or decline further, there needs to be "real evidence" that Strait of Hormuz shipping traffic is recovering, he told MarketWatch on Friday.
The national average for a gallon of regular gasoline stood at around $4.11 as of Friday afternoon, according to the American Automobile Association.
See: America's crude inventories are getting perilously low. But that's not the full story.
Even if a U.S.-Iran deal were to be signed this month, it would take "until the end of July, perhaps longer," for Strait of Hormuz traffic to fully normalize, Molchanov said.
Looking further out, Goldman Sachs has lowered its long-term oil outlook due to strong supply and lower demand in 2027, according to a team of analysts led by Daan Struyven, co-head of global commodities research and head of oil research.
The investment bank cut its average Brent price forecast for next year to $80 a barrel, from $85, citing potentially rising output from the U.S., Brazil, Guyana, Venezuela and the U.A.E. It also pointed to weaker oil demand, particularly in China, as the transition toward energy alternatives such as electric vehicles is expected to accelerate.
Struyven and his team said they continue to see Brent averaging $90 a barrel in the fourth ?quarter of 2026, noting that the impact of the prolonged disruption in the Strait of Hormuz has so far been balanced by a milder-than-expected supply shortfall.
Nora Redmond contributed.
-Isabel Wang -Myra P. Saefong
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(END) Dow Jones Newswires
June 12, 2026 15:39 ET (19:39 GMT)
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