FX.co ★ Oil Falls on Friday, Set for Monthly Drop

WTI crude oil futures fell about 2% to $87.20 per barrel on Friday, their lowest level in roughly six weeks, leaving them on course for a 17% decline for May. The drop followed reports that the United States and Iran have reached a preliminary understanding to extend a ceasefire and ease restrictions on shipping through the Strait of Hormuz. However, President Donald Trump has not yet approved the arrangement, and Iranian state media have said that no final agreement has been concluded.

The potential deal has strengthened expectations of a possible end to the US–Israeli conflict in Iran and a reopening of the Strait of Hormuz, a crucial corridor for roughly one-fifth of global oil and LNG shipments. Still, analysts caution that any recovery in flows is likely to be gradual. Mines would need to be cleared, damaged infrastructure repaired, and shut-in production restarted, while tanker bottlenecks could further slow the pace at which supply returns to the market.