Oil prices pared back some loses on Friday after an Iranian media outlet reported that the regime would not restore traffic through the Strait of Hormuz to its prewar levels
On Friday, Irna, the Islamic Republic’s news agency, reported that the strait would not return to its pre-conflict levels.
Earlier on Friday, oil prices extended losses from Thursday’s session on a report from Iran’s semiofficial Mehr News Agency that a draft peace deal would reopen the strait and lift oil sanctions on Iran. An official U.S. source has not yet responded to these claims.
On Thursday, President Donald Trump said that he “cancelled” strikes on Iran and claimed that a memorandum of understanding would be signed over the weekend in Europe, with negotiations having been brought “to the highest level of Iranian leadership and approved.” Iran’s Foreign Ministry spokesperson, Esmail Baghaei, reportedly responded that “nothing has been finalized.” Jim Reid, global head of macroeconomic research and thematic strategy at Deutsche Bank, wrote in a note on Friday that Brent crude’s overnight decline “led to a huge rally across bonds and equities,” as investors’ worries about a prolonged stagflationary shock were reduced.