Oil price drops amid hopes of US-Iran peace deal

Oil prices fell on Friday as investors hoped for an end to the US-Israel war on Iran , leaving the commodity poised for one of the biggest monthly declines ever. The price of Brent crude futures, the global benchmark, fell by 1.3% to $91.54 and is nearing a fall of 17% since the start of May. The price of futures for West Texas Intermediate, the North American benchmark, fell by 1.4% on Friday morning to $87.64 a barrel. That was down 7% from the peak earlier this week of $94.70. The optimism came after Donald Trump circulated a draft peace agreement for the war in Iran among allies. The US news site Axios reported that the US and Iran had reached a tentative deal to extend a ceasefire by 60 days, although it added that Trump had yet to agree to the terms. The US vice-president, JD Vance, said a deal was “not there yet” but “very close”. The war in Iran has lasted 90 days and has caused chaos across the global economy after Iran responded by closing the strait of Hormuz to shipping. That shut off a large proportion of exports from the Gulf, one of the world’s key oil-producing regions. While the US initially aimed at regime change in Iran, its ambitions appear to have been scaled back to reopening the strait, as well as reaching a deal to prevent Iran from building a nuclear bomb. Henry Allen, of Deutsche Bank, said markets were showing “mounting optimism about an end to the conflict”. …