On Friday, U.S. crude oil futures for July delivery dropped 1.65% to $86.26 per barrel, while Brent futures for August fell 1.55% to $88.98 per barrel following President Trump's comments about a possible agreement with Iran.
Trump indicated that negotiations had reached the highest levels of Iranian leadership and that military strikes against Iran had been called off, which he believes could lead to the reopening of the Strait of Hormuz. However, Iranian state media disputed Trump's claims, stating that no agreement had been approved and suggesting that the U.S. had reverted to previous demands.
Analysts from BMO Capital Markets noted that oil prices have remained stable despite recent tensions, attributing this to diplomatic efforts and alternative shipping routes.
Citi highlighted that lower Chinese crude imports have also played a role in moderating oil prices, estimating that China could maintain imports at around 8.7 million barrels per day without significantly depleting its inventories. This suggests that demand from China may not lead to a substantial increase in oil prices in the near term