Global Economy — 2026-05-07

Oil Crashes 7% and Israeli Shekel Hits 33-Year High as US-Iran Deal Reportedly Nears

Brent crude fell nearly 8% to $101.27 per barrel Wednesday and WTI dropped about 7% to $95.08 after Axios reported that Washington and Tehran were nearing an agreement to end the conflict. Axios cited two U.S. officials and two additional briefed sources who said the two sides were close to a one-page, 14-point memorandum of understanding. Trump publicly cast doubt, calling Iranian acceptance "perhaps, a big assumption," and threatened resumed military strikes at higher intensity if Iran refused; Iran's Foreign Ministry spokesperson told CNBC that Tehran was "evaluating" Washington's proposal and would accept only a "fair" deal. Israel's shekel gained 1.1 percent to reach a 33-year high against the dollar on the same reports. Trump had also announced Tuesday the temporary suspension of "Project Freedom," the U.S. commercial vessel escort through the Strait of Hormuz, citing progress in negotiations.

Analysis
The suspension of 'Project Freedom', the Strait of Hormuz vessel escort, is the most operationally concrete U.S. concession to date, explaining why markets treated Tuesday's announcement as more than rhetoric. Trump's public skepticism and Tehran's insistence on a 'fair' deal preserve full optionality for either side to abort. The 14-point memorandum per unnamed U.S. officials, a sourcing pattern consistent with deliberate pressure leaks, remains unconfirmed by either government. The coordinated leak pattern may instead constitute a campaign to soften Iran's negotiating posture rather than signal genuine proximity to agreement. With Brent $36 above the $65 threshold, there is almost no chance it remains below $65 for two consecutive weeks within the next 30 days.

4 sources