Oil Falls Below $100 as Washington and Tehran Move Toward a Potential Deal
Crude hopes are bubbling up — and oil traders are getting burned. US crude plunged below $100 a barrel on Wednesday, falling as much as 15% to $88, after Axios reported that Washington and Tehran are closing in on a one-page memorandum to end their roughly 10-week war. Brent slid as much as 11%, lifting markets on hopes the Strait of Hormuz could gradually reopen.
- Trump told the New York Post it was “too soon” to prepare a signing, saying reopening the strait depends on Iran accepting his terms.
- US gas prices crossed $4.50 a gallon for the first time since July 2022, climbing more than 50% since the war began and nearing the June 2022 record high.
Drilling through chaos: Even with Wednesday’s plunge, crude is still up over 60% year-to-date, suggesting traders continue to price in lingering Hormuz disruptions. That outlook is already pushing US shale producers to ramp up activity, with Diamondback EnergyFANG CEO Kaes Van’t Hof saying “the light has turned green” as the Permian could add up to 30 rigs, while ExxonMobilXOM targets 12% production growth this year. Peace or not, drillers are betting the oil shock is far from over.