Brent and WTI crude jumped Thursday after Iran's Fars News reported a framework agreement on the Strait of Hormuz that would bar U.S., Israeli, and other hostile vessels from the waterway until compensation is paid. President Trump said he called off a planned strike on Iran but warned Washington remains prepared to act if no deal is reached, while a surprise U.S. crude inventory build tempered the demand outlook.
Brent crude futures jumped 4% to $82.66 a barrel on Thursday after Iran's Fars News agency reported a framework agreement covering the Strait of Hormuz. U.S. West Texas Intermediate crude climbed 3.3% to $77.73 a barrel on the same report. According to the plan, cited by parliament member Alireza Salimi, passage of U.S., Israeli, and other hostile vessels through the waterway would be prohibited until compensation is paid. Both benchmarks were still on track for steep weekly losses.
Corridors would split entry and exit routes
The plan, still under review by Iranian authorities according to Fars, would route entry through a northern corridor near Iran's coast and exit through a southern corridor near Oman's, citing an informed source in Iran's foreign ministry. After a specified deadline, transit through both corridors would stop, shifting instead to a middle corridor that Iran would manage on entry and jointly run with Oman on exit. If confirmed, these terms would most likely be unacceptable to Washington — the Strait of Hormuz carried a fifth of the world's oil and gas before the Middle East conflict began in late February.
Trump warns Washington remains prepared to act
President Trump said this week that he called off a planned attack on Iran due to progress toward a deal, while warning that Washington remained prepared to act if no agreement is reached. Asked why he believed Iran would hold up its end of a deal this time, Trump said: "It may be, it may not be." He added that both sides have cycled through threats, attacks, and concessions since the war began, while Tehran has publicly denied negotiating directly with Washington, saying it deals only with mediators in Oman.
Inventory build weighs on demand outlook
Investors also weighed data showing U.S. crude oil inventories unexpectedly rose by about 2.5 million barrels last week, compared with expectations for a 1.5 million barrel drawdown, a sign of softer near-term demand. Refined fuel markets tightened further, with gasoline stockpiles falling 1.64 million barrels and distillate stockpiles falling 3.47 million barrels. Deutsche Bank's Jim Reid said attention is shifting from whether a deal can be reached to what the final arrangements will look like, including whether Iran will eventually be permitted to levy tolls on vessels using the Strait.
Source: Commodities & Futures News
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