Crude oil dropped below $100 a barrel on Thursday as traders bet that Iran would accept a one-page, 14-point framework that would end the war that began Feb. 28 and reopen the Strait of Hormuz to commercial traffic. Brent crude futures for July fell nearly 4 percent to $97.47 a barrel, and U.S. West Texas Intermediate futures for June dropped 3.88 percent to $91.39, a level last seen before President Trump and Israel began their joint air campaign against Iran more than two months ago.
The slide hands the White House the cleanest market signal yet that investors expect a deal, even as the terms remain in Tehran's hands. Iran's Foreign Ministry spokesperson, Esmaeil Baqaei, told reporters Wednesday that the government was still studying the U.S. proposal and would deliver its answer to mediators in Pakistan. Baqaei wrote on social media that talks require "a genuine attempt to engage in discussions with a view to resolving the dispute." The deal, first reported by Axios, would commit Iran to a moratorium on nuclear enrichment, lift U.S. sanctions and release frozen Iranian funds, and end the U.S. naval blockade that has kept traffic through the strait at a near-standstill since late February.
What shifted
Trump signaled Wednesday that the U.S. military offensive, which the Pentagon calls Operation Epic Fury, "will be at an end" if Iran "agrees to give what has been agreed to, which is, perhaps, a big assumption." If Tehran signs, the president wrote on social media, the strait will be "OPEN TO ALL, including Iran." He paired that with a warning that Iran would be bombed "at a much higher level" if no agreement comes together, a reminder that the framework is one social-media post away from collapse.
The price move follows two months in which Brent held near $108.11 as recently as last weekend and gasoline at U.S. pumps averaged $4.446 a gallon, the highest reading since July 2022. Crude is still up roughly 40 percent since the war began, according to CNBC's tally, even after Thursday's drop.
On the street
Equity strategists framed the move as the start of a recalibration rather than an all-clear. Scott Chronert, Citi's U.S. equity strategist, told CNBC's "Squawk Box" that the length of the conflict, more than the headlines around any single negotiating round, will set the trajectory for stocks and Federal Reserve policy.
"The duration of the conflict and the implication that has for higher oil prices for longer is a big deal as it pertains to future growth expectations for many parts of the market, as well as how it influences the Fed thinking in terms of the interest rate dynamic," Chronert said.
The Fed last week split 8-4 to hold its benchmark rate at 3.5 to 3.75 percent, the most divided vote since 1992, with the war's effect on inflation cited by dissenters on both sides of the table.
The corporate read
Industry earnings released Thursday underlined how unevenly the shock has landed. Shell posted adjusted first-quarter earnings of $6.92 billion, beating an LSEG consensus of $6.1 billion, as oil prices climbed roughly 40 percent since fighting started. Chief Executive Wael Sawan said the company delivered the result in "a quarter marked by unprecedented disruption in global energy markets." Shell trimmed its quarterly buyback to $3 billion from $3.5 billion, raised its dividend 5 percent to $0.3906 a share and saw net debt rise to $52.6 billion from $45.7 billion at year-end.
The view from the loading dock is darker. Maersk, the Danish shipping group widely treated as a bellwether for global trade, reported underlying earnings before interest, taxes, depreciation and amortization of $1.75 billion, a 35 percent decline from a year earlier. Shares fell about 7.2 percent. Chief Executive Vincent Clerc told CNBC the war has created a "new wake-up call" for global trade and estimated $500 million a month in extra costs for as long as oil sits near $100. Clerc warned that the heaviest hit on shipping is still ahead, in the second and third quarters, and questioned whether consumers can absorb the pass-through without cutting back. The company suspended two key Middle East-Asia and Middle East-Europe routes about a week into the war and has not restored them.
NPR reported that the major producers are not racing to fill the gap. On a call with investors last week, Chevron Chief Executive Mike Wirth summed up his production plans in four words: "Steady as she goes." If echoed across the supermajors, that posture leaves the supply response to a deal rather than to drilling.
Counterpoint
Today's reporting comes from center and lean-left wires; conservative outlets and administration backers had not weighed in on the framework's terms by press time, and the deal text itself has not been published. Maersk, in its earnings presentation, called the balance of risks around its own outlook "on the downside" and said "more adverse outcomes cannot be ruled out" if the strait does not reopen. The International Energy Agency has called the Hormuz disruption the biggest energy security threat in history, a label that does not fade with a single quiet trading session.
Iran's response to the U.S. proposal is expected through Pakistani mediators in the coming days. Trump said the bombing campaign resumes if it does not arrive.