Crude Oil Futures Decline Amid Iran's Latest Peace Negotiation Offer

Iran Proposal Sends Crude Oil Futures Diving

HOUSTON, May 1 - An Iranian proposal on negotiations with the U.S. sent crude oil futures plummeting on Friday, despite prices remaining on track for weekly gains. The proposal, sent to Pakistani mediators on Thursday, could potentially improve prospects for breaking an impasse in efforts to end the Iran war.

Brent crude futures for July settled at $108.17, down $2.23 a barrel, or 2.02%, while West Texas Intermediate futures finished at $101.94 a barrel, down $3.13, or 2.98%. However, the Brent benchmark and WTI were poised for a 2.95% gain over the week.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

The Iran proposal has given hope to the market that there is an off-ramp for the United States. Oil prices have been on the rise since the U.S. and Israel attacked Iran at the end of February, resulting in the closure of the Strait of Hormuz and the disruption of shipments of about a fifth of the world's oil and liquefied natural gas supply. A ceasefire has been in place since April 8.

UAE presidential adviser Anwar Gargash expressed deep mistrust of Iran, stating that Tehran could not be trusted over any unilateral arrangements it makes for the Strait of Hormuz. By the end of trading on Friday, the oil market appeared to be accepting the uneasy truce in the conflict.

The market rises and falls on the prospects of an outcome to the conflict, with the situation currently in a stalemate. A senior official of Iran's Revolutionary Guards had threatened "long and painful strikes" on U.S. positions if Washington renewed attacks on Iran, pushing oil prices to intraday peaks before retreating. U.S. President Donald Trump was scheduled to receive a briefing on Thursday on plans for a series of fresh military strikes on Iran to compel it to negotiate an end to the conflict.