Trump Stops Short of Sealing Iran Deal as Oil Posts Its Worst Month Since the Pandemic

A proposed 60-day ceasefire extension and the promise of open shipping through the Strait of Hormuz have pulled crude oil down sharply, even as the agreement remains unsigned.

President Donald Trump said on Friday that he had entered the White House Situation Room to make what he called a final determination on a deal with Iran, then met with aides for about two hours and put off the decision, according to a senior administration official cited by The New York Times.

The proposed agreement would extend the current ceasefire in the three-month-old war by 60 days and begin a new round of talks on Iran's nuclear program. The Financial Times reported that Washington is seeking a guarantee of "unrestricted traffic" through the Strait of Hormuz, the channel through which roughly a fifth of the world's oil passes, with Iran clearing mines from the waterway within 30 days.

Iranian officials offered a more cautious account. A senior diplomat told TASS that dialogue continues but the deal is "not done," and Tehran said its nuclear program was not being discussed and described Trump's public claims as a mixture of truth and statements that were untrue.

The market response was immediate. Brent crude oil fell about 1.2 percent on the day to roughly $92.56 a barrel and is down close to 19 percent for May, according to CNBC, the steepest monthly decline since the early pandemic. For an economy where the spring oil shock has already pushed underlying inflation higher, a durable easing of energy prices would relieve one of the larger sources of pressure on consumers and central banks. The risk is that the deal is not yet signed, and the gap between the public optimism and Tehran's denials leaves traders exposed to a reversal if talks collapse.