Oil prices slide over 2% following report of U.S.-Iran ceasefire

Oil prices fell sharply on Wednesday, extending  deep losses from the prior session after some media reports said the U.S. and Iran had agreed to a ceasefire deal.

Oil was also pressured by Iran and Oman stating they had resumed talks to potentially reopen the Strait of Hormuz.

News of the talks largely overshadowed the imposition of stricter economic sanctions on Iran by the U.S. earlier this week.

Brent oil futures slid 2.6% to $86.32 a barrel by 22:26 ET (02:26 GMT), while West Texas Intermediate crude futures fell 2.4% to $80.36 a barrel.

Oil tumbles amid reports of U.S.-Iran ceasefire 

Oil slumped over 5% on Tuesday after Russian media reported that the U.S. and Iran were close to a ceasefire deal.

Russian state-owned agency RIA reported the deal, citing Pakistani and Iranian sources. The reported deal includes free navigation through Hormuz and is expected to be announced in the coming days.

Investing.com could not immediately verify the RIA report.

Still, the report comes after Pakistani officials said this week that they had made progress in mediation talks with Iran, and had discussed restoring an interim ceasefire deal.

Pakistan has been a major regional mediator in the ongoing U.S.-Iran war, and had also helped broker a June ceasefire between the two.

Iran says back in talks with Oman over Hormuz passage

Iran said it had restarted talks with neighbor Oman over managing commercial traffic through the Strait of Hormuz.

The countries said they had discussed a “joint temporary navigational corridor” through the Strait.

The prospect of resumed commercial traffic through Hormuz weighed heavily on crude, as traders priced out some supply risks.

News of the Oman talks was preceded by Iran allowing some Iraqi oil tankers to also pass through Hormuz.

Still, shipping activity through Hormuz remained at a fraction of pre-war levels, keeping oil supplies from the region constrained. About 20% of the world’s oil had passed through Hormuz prior to the conflict, with its closure greatly disrupting global supplies and sending prices higher.

The renewed Iran-Oman talks also come just a day after the U.S. imposed stricter economic sanctions against Tehran, with Washington signaling a preference for economic pressure over military strikes against the country.