Oil Prices Plummet Amid US-Iran Truce Hopes and Diesel Export Ban
Oil prices fell by about 2% on Friday due to hopes for a truce between the US and Iran, along with talk of a potential US ban on diesel exports. This news overshadowed growing concerns over attacks by Houthi fighters against Saudi Arabia, which could disrupt oil supplies from the Middle East.
US and Iranian negotiators are exploring a phased path out of war that would involve Tehran reopening the Strait of Hormuz and Washington lifting its economic blockade on Iran. However, Iran has stated that it will not budge on its nuclear program, even if the US accepts its proposal to reopen the strait.
The complex is under pressure as markets assess the possibility of a diesel export ban and the diplomatic progress toward opening the Strait of Hormuz, according to analysts at energy advisory firm Ritterbusch and Associates. The premium of Brent crude over WTI rose to its highest since May for a third day in a row.