Crude oil prices fell sharply on Thursday as renewed optimism around a potential U.S.-Iran nuclear agreement raised the prospect of increased Iranian oil exports, adding bearish pressure to an already uncertain market. Brent crude futures dropped $1.56, or 2.36%, to settle at $64.53 a barrel, while U.S. West Texas Intermediate (WTI) crude fell $1.53, or 2.42%, to $61.62.
The market turned lower after U.S. President Donald Trump indicated a breakthrough in nuclear negotiations, suggesting Iran had “sort of” agreed to terms of a deal that could ease sanctions. A senior Iranian official also confirmed in an NBC News interview that Tehran is open to a pact in exchange for sanctions relief. “Immediate sanctions relief stemming from a nuclear agreement could unlock an additional 0.8 million barrels per day of Iranian crude for the global market – an undeniably bearish development for prices,” said Ole Hvalbye, analyst at SEB.
While Washington imposed new sanctions on Iran this week targeting its missile program and oil sales network, these moves coincided with a fourth round of U.S.-Iran nuclear talks in Oman, suggesting both pressure and negotiation are ongoing. The market is caught in a tug-of-war between supply threats and supply relief. “We are swinging between President Trump zeroing out Iran to bringing them into the community of nations,” said John Kilduff of Again Capital. “The threat to supply is in both directions.”
Geopolitical uncertainty persists elsewhere. In Europe, hopes for progress in the Russia-Ukraine war were dampened as Russian President Vladimir Putin declined a direct meeting with Ukrainian President Volodymyr Zelenskiy, suggesting limited near-term resolution. A peace deal could eventually boost Russian oil exports if sanctions ease.
On the demand side, the International Energy Agency (IEA) raised its 2025 oil demand growth forecast to 740,000 barrels per day, supported by better economic conditions and lower prices. However, demand growth for the rest of 2025 is expected to slow to 650,000 bpd, down from nearly 1 million bpd in Q1, as EV sales hit records and economic headwinds grow.
Meanwhile, oversupply concerns were exacerbated by U.S. EIA data showing crude inventories rose by 3.5 million barrels last week to 441.8 million barrels—far above the 1.1 million-barrel draw analysts had forecast.
In the Black Sea, CPC Blend exports are expected to rise to 1.6–1.7 million bpd in June, up from May’s planned 1.5 million bpd, adding to global supply.