Commodities
US Oil Update: Futures Drop as Iran Proposes Peace Framework via Pakistan
Crude oil futures slipped in midday trading on Friday as Iran delivered a fresh proposal for peace talks to the US through Pakistani mediators, fueling hopes for a diplomatic breakthrough that could eventually reopen the Strait of Hormuz.Front-month West Texas Intermediate crude futures dropped by 2.94% to $101.96 per barrel, while Brent futures were down by 2.04% to $108.12/bbl."With Hormuz remaining largely shut, oil prices have surged more than 25% over the past two weeks, driven by tightening supply and heightened geopolitical risk," Soojin Kim, research analyst at MUFG, said.Tensions between the US and Iran remain elevated despite a ceasefire. President Trump expressed displeasure with the current state of peace talks with Iran on Friday, blaming the country's disjointed leadership for preventing a deal to end the conflict that has roiled global energy markets.Iran sent its latest proposal for negotiations with the US to Pakistani mediators on Thursday, according to media reports, as Trump threatens to maintain the blockade of Iranian ports amid behind-the-scenes diplomacy to end the Middle East conflict.US envoy Steve Witkoff reportedly sent a list of amendments on Monday to reinsert the nuclear issue into the agreement under discussion, with one of the amendments demanding that Iran commit to not attempting to move any enriched uranium.On Friday, the US Department of the Treasury said it could sanction vessels that pay tolls to Iran for safe transit through the Strait of Hormuz, even if those payments are made as charitable donations to Iranian NGOs.The Department said Iranian demands for toll payments may include fiat currency, digital assets, offsets, informal swaps, or charitable donations made to the Iranian Red Crescent Society, Bonyad Mostazafan, or Iranian embassy accounts.Traffic through the Hormuz was cut by half on Apr. 30 to seven crossings from the previous day, with traffic split between four commercial and three non-commercial movements, according to Kpler.OPEC+ is expected to agree at the group's meeting over the weekend on another symbolic production increase of 188,000 barrels per day for June, following the UAE's surprise departure.Rystad analysts said the departure removes one of the few producers in the alliance with meaningful spare capacity and a strong compliance record, undermining OPEC+'s role as a coordinated supply manager.