(FOX NEWS) — Oil prices extended losses Wednesday, falling more than 5% after Iranian state TV said it had seen a draft framework for a potential agreement with the U.S. that would end the conflict and reopen the Strait of Hormuz.
The report, along with increased tanker traffic through the critical waterway, outweighed earlier concerns after Iran accused the U.S. of violating a ceasefire and a tanker reported an explosion off Oman’s coast.
U.S. West Texas Intermediate crude fell $5.19, or 5.59%, to $88.70 a barrel by 1305 GMT, while Brent crude dropped $3.66, or 3.7%, to $95.92. Both benchmarks touched their lowest intraday levels in more than a month.
Iranian state TV said the draft framework would have U.S. military forces withdraw from the vicinity of Iran and lift the naval blockade, while ship traffic through the Strait of Hormuz would be managed by Iran in cooperation with Oman.
“The market keeps reacting to headlines,” UBS analyst Giovanni Staunovo said, cautioning that Iran has also indicated a deal is not imminent and that oil flows through the Strait remain restricted.
