Brent crude fell below $100 per barrel Wednesday for the first time since the Hormuz crisis began in late February. The benchmark settled near $99.64, down roughly 9% on the day. WTI dropped 10.7% to $91.33. Both are the largest single-day declines since the strait closed.

The catalyst was a Tuesday night announcement from President Trump that he was pausing Operation Project Freedom, the Hormuz convoy escort program that had launched less than 36 hours earlier. Trump cited "great progress" toward a "Complete and Final Agreement" with Iran. The pause came at the request of Pakistan, which has served as the primary diplomatic channel between Washington and Tehran.

What a Deal Would Look Like

U.S. and Iranian officials are closing in on a one-page memorandum of understanding containing 14 points, according to a report from Axios citing unnamed officials. The framework explicitly excludes nuclear provisions. Iran has said any deal to open the strait comes first; nuclear enrichment limits would be addressed in separate, later talks.

Iran's stated condition has not changed: it will reopen the Strait of Hormuz once the United States lifts its naval blockade on Iranian ports. That blockade has prevented virtually all Iranian maritime commerce since late February.

As described in multiple reports, the emerging MOU would:

  • Establish a formal ceasefire framework replacing the informal one from April 8
  • Create a new mechanism governing Hormuz shipping access
  • Release frozen Iranian assets
  • Begin a pathway toward sanctions relief
  • Defer nuclear talks to a separate subsequent process

Iran's 14-point proposal, delivered through Pakistani intermediaries, calls for the full agreement to be completed within 30 days.

The Complications

Trump himself introduced the most significant caveat. In remarks Wednesday, he described a final deal as "perhaps, a big assumption" and expressed doubt that Iran would follow through. The US naval blockade on Iranian ports remains in place. Project Freedom is paused, not terminated.

No agreement has been signed. Iran's parliament security commission has publicly described US military activity in the strait as a ceasefire violation. Multiple factions within the Iranian government hold different views on acceptable terms. Iran's proposal contains no nuclear provisions, while US officials have previously said any lasting deal must address the nuclear program.

The 14-point framework has not been published by either government. What is known comes from unnamed officials and intermediaries.

What the Market Is Pricing

Brent at $99.64 is pricing a deal as the most likely outcome. From the crisis peak above $126 in late April to Wednesday's close, the market has unwound approximately $26 of geopolitical risk premium in less than two weeks.

For context: before the February crisis began, Brent was trading around $72. A full Hormuz resolution would not automatically return prices to $72. Physical supply recovery takes time, Iranian export capacity needs to rebuild, and tankers that have been rerouted or anchored require weeks to normalize flows. But the sub-$100 print reflects a market that now assigns majority probability to the strait reopening.

The risk is asymmetric from here. If a deal is signed and the strait reopens, Brent can push lower as physical supply rebalances. If talks collapse, the market will reprice upward sharply and quickly. Wednesday's 9% move reversed roughly what took four weeks to build after the ceasefire began.

Goldman Sachs's base case of $120, which it had maintained through last week, will face revision if this week's price action holds.

This article is for informational purposes only and does not constitute financial or investment advice. Oil market conditions can change rapidly. Consult a qualified financial professional before making investment decisions.