Oil Prices Drop After Trump Cancels Strikes as U.S.‑Iran Talks Resume

Overview

• President Trump said he canceled planned strikes on Iran and reported talks with Iranian leaders could produce an interim peace agreement soon, a development that began reversing the mid‑June rally.
• Markets reacted quickly with July West Texas Intermediate falling about 3.2 percent on Friday as reports spread that an interim U.S.‑Iran deal could be signed this weekend.
• Official data show the market remains tight: the EIA reported U.S. crude, gasoline and distillate stocks below their seasonal five‑year averages and the DOE raised its 2026 U.S. production forecast to 13.72 million barrels per day.
• Earlier threats to seize Kharg Island and reports of Iranian fire on U.S. bases had pushed fears that the Strait of Hormuz was closed, while the administration said U.S. forces helped more than 200 commercial ships transit the waterway.
• Analysts warn volatility will stay high because disruptions in Gulf exports, phased OPEC+ output moves and Russia‑Ukraine attacks on refining capacity keep physical supply fragile even if hostilities pause.