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US Oil Update: Futures Slide as Markets Price in Months-Long Normalization Process

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Crude prices slipped in after-hours trade on Wednesday as investors weighed the prospect of a prolonged recovery in energy trade flows against growing optimism that the US and Iran could reach a peace deal, even as President Trump said he was not satisfied with the negotiations.

Front-month West Texas Intermediate crude futures slipped 4.37% to $89.79 per barrel, while Brent futures fell 4.15% to $95.45/bbl.

Saxo Bank strategists said that even if a deal is reached, market normalization is likely to take months, with ongoing demand for replacement barrels and depleted inventories potentially leading to a higher price floor.

On Wednesday, Trump said the US and Iran still have issues to resolve in peace talks, after Washington dismissed an Iranian media report of a framework deal to restore shipping via the Strait of Hormuz and to lift a US naval blockade on Iranian ports.

"This report from Iranian-controlled media is not true and the MOU they 'released' is a complete fabrication," the White House said in a social media post on X. "Nobody should believe what Iranian state media is putting out."

The US President told a Cabinet meeting on Wednesday that Iran remained keen to end the war, but that the US is "not satisfied."

"We're not satisfied with it, but we will be - either that or we'll have to just finish the job," Trump said.

Meanwhile, an Iranian official reportedly said that Iran and Oman are negotiating a new framework for maritime transit via the Hormuz, noting that previous arrangements will no longer govern passage through the strategic waterway.

Trump said no country would be allowed to control the Strait, adding that the strategic waterway would remain open to all nations and that the US would "watch over it."

Iran and Oman are both neighboring littoral states and are jointly negotiating a new mechanism for the passage of ships through the Strait of Hormuz, Ali Bagheri, deputy secretary of Iran's Supreme National Security Council, reportedly said.

Bagheri said Iran's enriched uranium stockpile is not part of the current peace talks, and the two sides have not yet reached an agreement on the reopening of the Strait.

For now, the strategic waterway remains effectively blocked, subject to the dual blockade by the US and Iran.

The International Energy Agency said in its May Oil Market Report that with Hormuz tanker traffic still restricted, cumulative supply losses from Arabian Gulf producers already exceed 1 billion barrels, with over 14 million barrels per day of oil now shut in.

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US Oil Update: Futures Mixed as Traders Weigh Iran Retaliation Risks

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