West Texas Intermediate (WTI) crude oil experienced significant volatility on Thursday as traders responded to rapidly evolving developments between the US and Iran. WTI initially surged to an intraday high of $91.27 per barrel following reports of fresh attacks in the Middle East, including US armed forces targeting Iranian military sites and Iran claiming it had targeted a US airbase in the Gulf region [1]. However, these gains were quickly reversed after an Axios report indicated that the US and Iran had reached a preliminary agreement, which sent WTI down to an intraday low near $86.28 before stabilizing around $88 per barrel at the time of writing [1].
The Axios report suggested that the two sides had agreed on a 60-day memorandum of understanding (MOU) to extend the current truce, though the deal still requires final approval from US President Donald Trump [1]. This development raised hopes that both sides may be moving closer to a broader agreement. Despite this, oil prices did not fall significantly further, as traders awaited more details and confirmation of a final agreement, keeping WTI trading near the lower end of its recent war-driven range [1].
Major issues remain unresolved, including Iran’s nuclear program and control over the strategically vital Strait of Hormuz. On Wednesday, the US Treasury announced new sanctions targeting the newly formed Persian Gulf Strait Authority, with Treasury Secretary Scott Bessent warning that the US “won’t tolerate a tolling system in Hormuz” and that “any willing partners in tolling in the Strait of Hormuz will be penalized” [1].
Overall, the market reaction was cautious, with traders closely monitoring further developments and awaiting confirmation of any final agreement between the US and Iran [1].
CONCLUSION
WTI oil prices saw sharp swings as hopes for a US-Iran agreement tempered initial gains driven by Middle East tensions. While a preliminary truce extension was reported, unresolved issues and new US sanctions kept the market cautious. Traders are awaiting further details before making decisive moves.