Oil plunges, markets surge on report U.S. and Iran near deal to end war as gas prices jump past $4.50
The nationwide average of $4.54 is now fewer than 50 cents from its all time high of $5.02, which it rose to in June 2022. Since the war with Iran started, gas prices have surged more than 50% for consumers.
The reported progress toward ending the war on Wednesday came after Trump abruptly ended “Project Freedom,” an effort to help guide stranded commercial vessels through the Strait of Hormuz.
Trump cited “great progress” in peace talks. His pause came after multiple officials earlier Tuesday held briefings and gave interviews promoting the “project.”
As of late Tuesday though, only two commercial vessels were guided safely to freedom, both of which had U.S. military security teams aboard as Iran launched attacks against them, two U.S. officials told NBC News.
Thousands more ships remain stranded and unable to cross the critical waterway due to threats and attacks from the Iranian regime.
U.S. officials have insisted that the ceasefire between the two countries was still in place despite this week’s exchange of fire in the strait.
Previous efforts to reach a deal with Iran have fallen short. Vice President JD Vance, special envoy Steve Witkoff and Trump’s son-in-law Jared Kushner held in-person talks in the Pakistani capital Islamabad last month, but they left empty handed.
A second round of talks was set to be held but were canceled before U.S. officials departed, after Trump said Iran’s offer was “not good enough.”
“They can call us anytime they want,” Trump said after canceling the trip.
Since efforts to end the war began, Trump has frequently switched between publicly projecting progress and dismissing the talks as futile.
Just days before announcing “great progress” on Tuesday, Trump said he doubted Iran’s latest proposal would be acceptable. He has also suggested that internal divisions in Tehran have hampered talks, something Iran has denied.
The shifting narratives from Washington have sent markets on a wild ride. At one point, some major indexes had fallen more than 10% from their most recent record highs.
As of Tuesday’s market close, most major indexes are now above where they were when the war started.
Nonetheless the effective shuttering of the key trade route since the U.S.-Israeli war has been a primary cause of the more than 40% jump in oil prices.
Normally, hundreds of ships per day would transit the strait, bringing more than 20% of the world’s oil supply to the global market.
On Tuesday, just one ship crossed the Strait of Hormuz, according to ship tracking services. On Monday, that figure was only 4 ships.
Even with Wednesday’s drops, the price of oil is still up more than 60% since the start of the year.