WTI crude falls to 3-month low after Trump signs Iran deal

WTI crude fell to its lowest since early March after President Donald Trump said a preliminary U.S.-Iran agreement to end the war and reopen the Strait of Hormuz is scheduled to be signed, potentially adding millions of barrels of daily supply to global markets.

"The US is confident that a deal to end the war with Iran will be signed in the next few days," a senior Trump administration official said, as reported by the BBC.

Trump wrote on Truth Social that the Strait of Hormuz would be "OPEN TO ALL" immediately after the signing. The agreement would prevent Iran from obtaining a nuclear weapon "through purchase, development, or any other form of procurement," he said, adding that the U.S. would eventually remove and destroy Iran's remaining enriched uranium, which he described as "Nuclear Dust."

The reopening of the Strait of Hormuz — through which about 20 million barrels of oil pass daily — would unwind the supply disruption that has supported crude prices since the conflict began in late February. Iran has not publicly confirmed the timeline, with Foreign Minister Abbas Araghchi saying only that a deal "has never been closer."

The agreement marks a sharp reversal from months of military confrontation. The U.S. and Israel struck Iranian nuclear facilities in June 2025, which American officials said significantly set back Tehran's ability to build a weapon. At the time of those strikes, the International Atomic Energy Agency estimated Iran held 440.9 kilograms of uranium enriched up to 60% purity — below the 90% threshold for weapons-grade but well beyond the 3.67% limit set by the 2015 nuclear deal.

Trump contrasted his emerging agreement with the 2015 Joint Comprehensive Plan of Action negotiated under former President Barack Obama, calling that deal "a smooth road to a nuclear weapon" and describing his own as "a wall to no nuclear weapon." He insisted no money would change hands under the agreement, unlike what he described as payments made to Tehran under the earlier accord.

The last time the Strait of Hormuz faced a sustained disruption was during the Iran-Iraq war in the 1980s, when crude prices swung sharply as tanker insurance rates surged. The current conflict, which began Feb. 28, had removed roughly 1.5 million barrels a day of Iranian crude from the market, according to tanker tracking data, while also threatening shipping through the broader Persian Gulf region.

The reopening would ease one of the most significant supply constraints in global oil markets. The waterway between the Persian Gulf and the Gulf of Oman handles roughly a fifth of global petroleum consumption, and its closure since the war began had pushed crude prices higher and strained refining margins worldwide. Lower oil prices would provide relief to import-dependent economies across Asia and Europe while pressuring U.S. shale producers who had benefited from the supply premium.

Iran has signaled caution over the exact timing. State-run media has described any possible deal as more of a 60-day extension of a ceasefire so both parties can continue negotiations, rather than a final end to the conflict. Pakistan has said an electronic signing could take place within 24 hours.

"If it doesn't" work out, Trump wrote, "we have the ultimate alternative, hopefully never to be used again."

This article is for informational purposes only and does not constitute investment advice.