Oil prices collapsed to 2-week lows amid reports that the US and Iran are close to a peace deal framework

Oil prices continued their decline on Wednesday, falling to two-week lows following a statement from a Pakistani source that the US and Iran are nearing a framework for a peace deal, Reuters reports, according to UNN.

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Brent crude futures fell by $9.08, or 8.3%, to $100.79 a barrel by 12:05 GMT (15:05 Kyiv time), having earlier dropped below $100 for the first time since April 22. US West Texas Intermediate crude lost $9.12, or 8.9%, to $93.15.

Both benchmarks showed their largest daily decline in absolute and percentage terms since mid-April and reached their lowest levels in two weeks, after losing about 4% in the previous session.

A source from Pakistan, acting as a mediator, said the US and Iran are close to an agreement on a one-page memorandum of understanding.

US and Iran close to one-page memorandum to end war - Axios06.05.26, 14:07 • 3464 views

The American media outlet Axios reported that the US is awaiting Iran's response on several key points within the next 48 hours, citing sources who claim this is the closest the parties have come to a deal since the start of the war.

Iran previously stated it would only accept a fair and comprehensive agreement.

On Monday, the US military said it destroyed several Iranian small craft as part of efforts to assist stranded vessels in exiting the Strait of Hormuz.

Reduced oil supplies due to the halt of maritime shipping through the strait since the start of the war in February have driven prices up, with Brent crude reaching its highest level since March 2022 last week.

The closure of the Strait of Hormuz has led to a reduction in global oil and fuel stocks, as refineries struggle to compensate for production shortfalls.

US crude inventories fell for the third consecutive week, while gasoline and distillate stocks also declined, market sources said Tuesday, citing American Petroleum Institute data.