Crude oil plunges 5% to hit 13-week low on reports US-Iran MoU to reopen Strait of Hormuz

Iranian state media reports suggest that the draft MoU is set to lift the oil sanctions on Iran and reopen the key maritime crude oil trading route, the Strait of Hormuz, within the next 30 days.

Reports on this move are a step towards the long-awaited potential peace agreement between the United States and Iran. However, no official sources have released information on the same.

As per the Iranian state media, Mehr News Agency’s report, the 14-point MoU also indicated that the final negotiations will not begin until half of Iran’s frozen funds are released, oil sanctions are suspended, and the US naval blockade is lifted.

Brent drops to a 13-week low

Global benchmark, Brent crude oil prices, dropped to a 13-week low level, its lowest since March 10, 2026, after reports emerged of the US and Iran coming up with an MoU which will potentially begin the end the West Asia conflict.

During the afternoon market hours, India time, the Brent crude oil futures dropped over 5% to their intraday low of $85.82 per barrel (bbl) on June 12, compared to $90.38 per bbl level at the previous commodity market close, as per Investing.com data.

The data further showed that the oil prices have declined more than 7% in the last one week, and more than 19% in the past month. Crude oil prices were trading 13.95% lower over the last three month basis.

The West Texas Intermediate (WTI) crude oil prices were trading 4.3% lower at $83.91 per bbl as of the market session on June 12, compared to $87.71 per bbl at the previous market close.

Trump’s signal of a peace deal

On Thursday evening (ET), US President Donald Trump said that the United States had cancelled all the scheduled military strikes and bombings on Iran as both countries, along with their partners in the West Asian region, have hit a breakthrough in negotiations.

“Discussions and final points have been, in both concept and great detail, approved by all parties involved,” said Trump in his Truth Social post.

However, Trump also said that the time and place of the ‘signing’ will be announced soon, and the impact of the signal was fuelling the global markets on Friday’s trading session.

In his post, Donald Trump also said that the US Navy blockade of the Strait of Hormuz will remain in effect with “full force” until the deal is finalised.

OMC stocks rise

Bharat Petroleum (BPCL), Hindustan Petroleum Corp. (HPCL), Indian Oil Corp. (IOC), and Reliance Industries shares surged after the sharp drop in oil prices in the global market.

NSE data showed that BPCL shares were trading 5.3% higher, Hindustan Petroleum shares were up 6%, Indian Oil shares up 5%, and Reliance Industries shares surged 5% as investors focused on the lower oil prices in the market.