Oil extends largest weekly decline since 2020 on expectations of easing Iran tensions

Summary

International oil prices extended their largest weekly decline since April 2020 as expectations for easing U.S.-Iran tensions pressured crude. Brent fell to $96.92 and WTI to $90.09 earlier, then dropped to $93.63 and $86.77 after reports of possible Iranian concessions on Hormuz, Trump saying further strikes were 'extremely unlikely' if talks progress, and an Iraq-U.S. understanding on exports; however, Rubio said progress was limited and U.S. strikes on Qeshm continued.Zhitong+ 3

Impact Analysis

The interesting part isn't that Brent slipped to $93.63 and WTI to $86.77 after last week's >16% drop; it's that the market is front-running a peace deal while the facts still look like a negotiation, not a settlement. Trump's 'extremely unlikely' language and Iraq's export understanding reduced the war-risk premium Zhitong+ 2, but Rubio's 'limited progress' and the fresh Qeshm strike are the tell: escalation risk hasn't been removed, only repriced Zhitong. I'd read this as a classic headline-driven unwind: geopolitical optionality gets sold before verified supply returns. That creates a short-term trade in energy volatility, not a clean directional short. If talks stall or Hormuz incidents recur, the gap between a $95 Brent and a still-fragile Middle East supply chain Sina Finance will snap back fast. Meanwhile, the disinflation impulse is real—lower crude eased inflation fears and ECB-hike expectations Reuters—but I'd hedge it, not chase it, until nuclear/Hormuz concessions are concrete.