Oil prices drop on report of US-Iran ceasefire deal pending Trump approval

Oil prices fell on Thursday after Axios reported that the United States and Iran had reached an agreement for a 60-day ceasefire extension and the start of talks on Tehran's nuclear program, pending final approval from President Donald Trump.

Brent crude dropped to a low of $93.36 a barrel from an earlier high of $98, before rebounding to about $94. The decline came despite fresh US airstrikes on an Iranian military site in Bandar Abbas, a strategic port city, which Iran called a grave violation of the ceasefire.

The agreement requires final approval from Trump, who told negotiators he wanted a few days to make the final decision, Axios reported.

The US Central Command (Centcom) said its forces shot down four Iranian drones "that posed a threat around the Strait of Hormuz." Centcom also confirmed strikes on southern Iran earlier this week targeting Iranian missile sites and boats attempting to lay mines in the strait, saying those strikes were designed "to protect our troops from threats posed by Iranian forces."

Iran called the new attacks "a grave violation of the ceasefire" and said it "will not leave any act of hostility unanswered."

The US and Israel launched airstrikes on Iran on 28 February, and Tehran responded by threatening to attack vessels using the Strait of Hormuz. Around a fifth of the world's oil and liquefied natural gas (LNG) supplies usually pass through the strait. Before the war, Brent crude was trading at closer to $70 a barrel; it briefly surged to around $120 a barrel after the conflict began.

Kuwait's military said on Thursday it was intercepting "hostile missile and drone threats" without providing further details.