EMEA crude futures retreated in after-hours trading on Thursday, extending losses to multi-week lows, as markets weighed growing expectations of a potential US-Iran peace deal that could ease Middle East conflict and restore crude flows through the Strait of Hormuz.
Brent crude futures dropped 3.5% to $87.23 per barrel, while Murban crude futures were down 3.7% to $83.99/bbl.
Saxo Bank strategists said crude slumped after Trump talked up another peace deal, with markets this time appearing increasingly willing to believe it may be for real, despite the lack of confirmation from Iran.
The US and Iran are reportedly edging closer to an agreement to reopen the Hormuz, with a memorandum between the two countries expected to be signed at next week's Group of Seven meeting.
On Friday, Trump denied that the Iranian text represented what the US and Iran had agreed in writing. The US President disparaged the Iranian authorities as "very dishonorable people to deal with" who do not negotiate in good faith.
He accused Iran of launching a drone at an Indian vessel overnight, denouncing the attack as unacceptable.
"The terms that Iran leaked out to the Fake News have NOTHING to do with the terms that were agreed to, in writing," Trump said in a Truth Social post.
Iranian media published a document in which the US would agree to withdraw its forces from around Iran, lift its naval blockade within 30 days, and provide the country with $300 billion in reconstruction funds.
Tehran would reopen the Strait in 30 days, but under arrangements set by Iranian authorities.
Soojin Kim, research analyst at MUFG, said that while Trump indicated that negotiations were nearing completion and suggested Iran's leadership had broadly agreed to a framework, Iranian officials have not confirmed any deal.
Following Trump's denial of the Iranian report, Foreign Minister Seyed Abbas Araghchi said in a social post that a memorandum of understanding between the US and Iran "has never been closer."
"Pending its finalization, the media should refrain from entering speculation about its content," Araghchi said. "In line with our responsible and transparent approach, all details will be shared with the public in due course."
Pakistan's Prime Minister Shehbaz Sharif said on Friday that a final, agreed text of a peace deal between the US and Iran had been reached.
"We can confirm that a final, agreed-upon text of the peace deal has been reached and Pakistan is now working closely with both sides to finalize the next steps," Prime Minister Sharif said in a social media post on X.
Meanwhile, OPEC lowered its forecast for global crude demand growth in 2026 to 970,000 barrels per day, according to the producer group's monthly report published on Thursday.
The current forecast reduced the expected oil demand growth in 2026 from 1.17 million b/d previously forecasted. For 2027, OPEC projected that demand would rise by 1.73 million b/d, up 190,000 b/d from the previous forecast.