Oil prices edged lower on Thursday after reports suggested the US and Iran had reached a memorandum of understanding that would extend their ceasefire by 60 days and reopen the Strait of Hormuz. The move could ease pressure on tanker routes out of the Persian Gulf, but President Donald Trump still needs to sign off.
The market had already been leaning that way. Traders had spent the week pricing in the possibility of a deal, and crude kept softening as optimism grew that shipping through the chokepoint could resume. A reopening of the strait would bring immediate relief to oil flows, especially for tankers leaving the Persian Gulf.
That drop came even as the wider oil market remained tight. US commercial crude inventories fell by 3.3 million barrels last week, while total crude stocks dropped by 12.39 million barrels when SPR releases were included. Crude exports also fell by 1.16 million barrels a day to 4.44 million barrels a day, even as US refinery run rates jumped 2.9 percentage points to 94.5%. Gasoline stocks fell by 2.57 million barrels and distillate stocks by 2.11 million barrels.
The regional backdrop has been shaped by months of damage and lost supply. Upstream oil production has fallen sharply since the war, and Persian Gulf crude supply excluding Qatar was down 10 million barrels a day in April 2026 from pre-war levels. Refinery infrastructure in the region was also targeted in attacks earlier in the conflict, which means refined product flows are unlikely to normalise quickly even if the ceasefire holds.
There is still a reason traders are not treating this as settled. Shipowners could be slow to send vessels back into the Persian Gulf at first, fearing the ceasefire could break down, and there has been little detail from the Iranian side on how far the memorandum would actually reach. That leaves Trump’s decision as the next market-moving step, and it is the one that will decide whether the price slide turns into a deeper move or stalls here.
