Oil Prices Dip as U.S.-Iran Deal Hopes Clash with Tehran’s Pushback

Last updated: June 12, 2026 7:24 am

5 days ago

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Oil prices eased on Friday as President Donald Trump announced a potential framework agreement with Iran, signaling hopes for easing Middle East tensions. However, these hopes were tempered by Iranian media reports denying approval of any draft deal, creating market uncertainty.

Despite the diplomatic developments and geopolitical risks, oil prices have remained relatively contained, supported by alternative shipping routes and reduced Chinese crude imports, according to market analysts.

Oil Prices Dip as U.S.-Iran Deal Hopes Clash with Tehran's Pushback

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APA Corporation's Beryl Alpha oil platform in the North Sea.

Oil prices experienced a downturn on Friday, influenced by President Donald Trump's announcement of a potential framework agreement with Iran. This development, while sparking hopes for a de-escalation of tensions in the Middle East, has been met with a degree of pushback from Tehran, creating a complex market dynamic.

U.S. crude oil futures for July delivery saw a decline of 1.61%, settling at $86.30 per barrel. Simultaneously, August futures for the international benchmark Brent crude fell by 1.75% to $88.8 per barrel.

Brent oil price trend.

President Trump, speaking from the Oval Office, expressed optimism that an agreement could be finalized within days, a sentiment he has reiterated throughout the ongoing conflict. He also indicated that the crucial Strait of Hormuz would be reopened following the finalization of any deal.

Earlier in the day, Trump revealed that a planned U.S. military strike against Iran had been called off, stating that negotiations had reached the highest levels of Iranian leadership and received approval. However, Iranian state-affiliated media, such as Fars News Agency, countered these claims, reporting on Telegram that Tehran had not approved any draft memorandum of understanding with Washington.

Fars portrayed Trump's announcement as a retreat from his earlier military threats, suggesting that he had failed to introduce new elements beyond an existing Iranian proposal. The outlet stated, "The reality is that up until now, not only has Iran not given a final response, but it is the US that has returned to its previous demand." It further suggested that if the U.S. has indeed accepted Iran's proposed text, there is a possibility of re-examining it.

Analysts at BMO Capital Markets noted that oil prices have shown resilience despite recent U.S.-Iran exchanges. They attribute this stability to ongoing diplomatic efforts, the availability of alternative shipping routes around the Strait of Hormuz, and a significant reduction in Chinese crude imports, all of which are helping to buffer geopolitical risks.

Citi analysts similarly observed that lower Chinese crude imports have played a role in moderating oil prices since the onset of the Middle East conflict. This reduction in demand from China has eased concerns about a potential bidding war for supplies. Citi estimates that China can maintain imports around 8.7 million barrels per day without substantially depleting its inventories, suggesting that Chinese demand might not significantly drive up prices in the immediate future.