Oil Prices Slide as Market Weighs U.S.-Iran Deal Prospects

Front-month crude oil futures extended losses Thursday morning, with West Texas Intermediate (WTI) falling 3.26% to $91.98 per barrel, according to live price data. The international benchmark Brent crude dropped 3.1% to $98.13. The price for Bakken crude at the wellhead widened to a discount of $3.42 below WTI.

The selloff follows a steep 7% crash on Wednesday and reverses early Asian trading gains, as the market digests the potential for a diplomatic agreement between the United States and Iran. According to a report from OilPrice.com, prices wavered amid investor concern that a deal is not as imminent as earlier signals suggested. The continued blockage at the Strait of Hormuz and fast-depleting global inventories provided some support, paring losses.

The market movement is heavily tied to geopolitical headlines. OilPrice.com reported that the selloff eased late Wednesday after U.S. President Donald Trump said it was still “too soon” for direct talks with Tehran, with Iranian officials signaling major sticking points remained on the nuclear program. The U.S. has reportedly sent a proposal for a one-page memorandum that could lead to a gradual re-opening of the Strait of Hormuz and lifting the U.S. blockade on Iranian ports, but Iran has yet to respond.

Analysts note the physical market realities are at odds with political timelines. Rystad Energy Chief Oil Analyst Paola Rodriguez-Masiu warned that the physical market "does not run on political timelines," according to Rigzone. This sentiment was echoed by ING commodities strategists, who noted in a Thursday note that "crude inventories in the US continue to tighten, while buyers have become more reliant on US barrels to offset disrupted Middle Eastern supply," OilPrice.com reported.

For Bakken operators in North Dakota, the sharp retreat in prices, combined with a wider local differential, directly impacts cash flow and drilling economics. The nearly $4 drop in WTI from Wednesday's levels, if sustained, could pressure margins, particularly for higher-cost wells. The market's heightened sensitivity to geopolitical news underscores the volatile environment for shale producers, who must navigate rapid price swings driven by events far from the Williston Basin.

Natural gas prices also saw a slight decline, trading at $2.70, down $0.03.