US-Iran Deal Reports Send Crude to Three-Month Low

West Texas Intermediate crude plunged $3.71 to $84 a barrel on June 12, its lowest level in three months, after reports that the Trump administration and Iran have reached a draft memorandum of understanding to reopen the Strait of Hormuz and ease sanctions. Brent crude fell $3.68 to $86 a barrel the same day.

The price drop followed President Trump’s decision to cancel planned military strikes on Iran, according to reports citing Iranian state media. The draft MoU, published by Iranian official outlets, would reopen the Strait of Hormuz within 30 days, potentially restoring oil flows that have been disrupted by months of regional tensions.

Crude benchmarks had already slid below $90 in recent days as traders reassessed supply risks in the Gulf. WTI had traded between $85.13 and $95.47 through June 11, settling near $85.93, before the diplomatic news knocked prices below $85 for the first time since March.

The reported deal remains unconfirmed by official US or Iranian government sources. The Strait of Hormuz, a chokepoint through which roughly a fifth of global oil passes, has been at the center of the supply disruptions that pushed prices higher earlier this year.

The next market-moving event is the potential formal announcement of the US-Iran MoU. If confirmed, the reopening of the Strait of Hormuz could add millions of barrels per day back to global supply, keeping downward pressure on crude prices through the end of June.