Oil Prices Slide Amid Hopes for US-Iran Truce and Diesel Export Ban Threat
Oil prices slipped about 2% on Friday as hopes for a US-Iran truce and talk of a possible diesel export ban weighed on markets. Brent futures fell $2.28, or 2.1%, to settle at $104.32 a barrel, while West Texas Intermediate (WTI) crude dropped $2.20, or 2.3%, to settle at $92.41.
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 of Iran. However, Iran said it will show no flexibility over its nuclear program even if the US accepts its proposal to reopen the strait.
The US talk of a possible ban on diesel exports is widening the gap between US crude oil futures and the global Brent benchmark, a signal that markets expect US refiners to process less crude oil if their diesel output gets stuck at home.