US and Iranian negotiators reached a tentative agreement Thursday to extend the ceasefire 60 days and resume nuclear talks, according to four sources cited by Reuters. The deal is not signed. It sits on Trump's desk awaiting his approval, the White House has declined to comment, and Iran has not publicly confirmed it. Oil markets are trading as though it is done anyway.
Brent crude fell to roughly $92.50 on Friday, down more than 1% on the day. WTI dropped to about $87.40. For the week, Brent is down 10.5% and WTI 9.2%, the steepest weekly declines since early April. Brent is now down roughly 19% for the month of May and about 20% off its 2026 highs. The benchmark traded near $70 in late February before the war began.
The market has decided the deal closes. The facts on the water are messier.
What the Tentative Deal Contains
The framework reached Thursday would extend the April 8 ceasefire by 60 days and restart formal nuclear negotiations during that window. The reported terms: the Strait of Hormuz stays open with no tolls, Iran clears the naval mines it laid, the US lifts its port blockade and issues sanctions waivers allowing Iran to sell oil freely, and up to $24 billion in frozen Iranian assets is released.
The nuclear core remains unresolved. Washington's position is unchanged, summarized by officials as "no dust, no dollars" — no sanctions relief flows until Iran's roughly 1,000 pounds of highly enriched uranium leaves the country. That is the same sticking point that has defined the talks since early May, and it is the reason the 60-day extension exists: it defers the hardest problem rather than solving it.
Treasury Secretary Scott Bessent added one new detail Friday, saying he received assurances from Oman that it will not toll the strait either. Oman controls the southern side of the Hormuz shipping lanes, so its position matters as much as Iran's for any guarantee of free transit.
Why "Unsigned" Is the Whole Story
Vice President Vance was the clearest voice on the state of play. Asked whether Trump would sign, he said it was "TBD," that the two sides were "not there yet" but "close," and that they were still working through "a couple of language points." That echoes Rubio's earlier framing that the remaining disagreement is over "a word, a sentence" in the nuclear and sanctions language.
A tentative deal that hangs on specific treaty language is not a closed deal. The last mile of these negotiations is where they have repeatedly stalled. Iran's public silence is its own signal: Tehran has not confirmed the agreement, which means either it is genuinely close and waiting for the choreography of a joint announcement, or it is preserving room to reject the final text. Both readings are live.
For oil, the gap between "tentative" and "signed" is the entire risk. The market has priced in the optimistic resolution. A signature this weekend would push prices lower still. A collapse over a disputed clause, or a fresh Hormuz incident, would reverse a chunk of the 20% decline very quickly.
Iran Was Still Shooting
The clearest illustration of that risk came Thursday, the same day as the tentative deal. Iran's Revolutionary Guard navy fired warning shots at four vessels near Hormuz that attempted to transit without, in Tehran's framing, "prior coordination or authorization" — meaning without paying the Persian Gulf Strait Authority fee or filing the required transit paperwork. Iranian agencies initially reported the episode as missile strikes; the IRGC later characterized it as an "exchange of fire." No ship hits or casualties were confirmed.
The detail matters because it shows Iran is still enforcing its permit-and-fee regime while the market prices in unrestricted navigation. The PGSA toll structure, up to $2 million per ship payable in Chinese yuan, remains in force. Mine clearing, which the deal promises, has not begun and is contingent on a signature that has not happened. Tanker traffic through the strait remains well below pre-war averages. The physical reopening the price action implies is not yet underway.
What Is Actually Driving the Selloff
The 20% decline from the highs is a deal-optimism trade, not a supply-restoration trade. The supply has not been restored yet. What has changed is the market's probability weighting on how this ends.
Three weeks ago, traders were pricing a meaningful chance of a sustained US-Iran military conflict that could keep Hormuz closed for months. Today they are pricing a 60-day ceasefire extension that leads to a broader settlement. The risk premium that drove Brent to $111 has been unwound faster than the physical supply has returned, which is why prices have fallen below where they were even during the partial reopening last week.
ING's commodity strategists captured the dynamic plainly: the market is edging lower on growing optimism that the US and Iran are moving toward a deal. The equity markets confirm the same risk-on read, with the S&P 500 near record territory and Asian indices up sharply.
The Weekend Risk Runs Both Ways
This is the most consequential weekend for oil since the crisis began, and the outcome is binary.
If Trump signs and Iran confirms, the 60-day ceasefire holds, mine clearing begins, the blockade lifts, and Brent likely tests the high $80s as physical supply finally starts returning. The structural case for sub-$90 oil strengthens with every tanker that clears a de-mined strait.
If the language dispute breaks the deal, or if one of Iran's Hormuz warning-shot episodes turns into an actual hit, the risk premium comes back fast. Brent retesting $105 over a single weekend headline is entirely plausible given how thin the current floor is.
The market has placed its bet. The signature has not. The next 72 hours decide whether the 20% selloff was early or correct.
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.