West Texas Intermediate crude is down 3.6% to $80.55 a barrel in midday trading Friday, on pace for its worst single-day drop since early April, as progress toward a US-Iran ceasefire framework raises the probability that Iranian crude exports could re-enter global markets for the first time since sanctions were reimposed in 2018. Brent crude has fallen 3.2% to $84.75.

The price action reflects a rapid repricing of geopolitical risk. The Strait of Hormuz chokepoint, through which roughly 20% of global oil transit, had carried a significant conflict premium since tensions escalated in late 2025. A durable ceasefire — reports suggest a 60-day framework with a roadmap for sanctions relief discussions — would remove the single largest upside tail risk in oil markets. Energy Aspects estimates that full sanctions relief could bring 500,000 to 700,000 barrels per day of Iranian crude back online within three to six months, a volume sufficient to flip the global market from deficit to surplus by Q3 2026.

The volatility has been extreme. WTI swung in a $4.80 range overnight — from an intraday high of $84.25 to a low of $79.45 — as conflicting reports on the status of negotiations crossed trading desks. The overnight range is the widest since the October 2025 escalation. Volume on NYMEX WTI futures has reached 890,000 contracts, 60% above the 30-day average.

Energy equities are reflecting the move. The XLE Energy Select Sector ETF is down 2.3% to $89.80. ExxonMobil is off 2.1% to $121.40. Chevron has fallen 1.9% to $161.20. ConocoPhillips is the hardest hit among majors, sliding 3.4% to $110.50, reflecting its disproportionate exposure to a lower-for-longer crude price environment given its Permian Basin development pipeline. Independent producers are under heavier pressure — Pioneer Natural Resources is down 3.8% and EOG Resources is off 3.5%.

Refiners present a more nuanced picture. Marathon Petroleum is down 2.1% on the crude slide, but Valero is up 0.6% as lower feedstock costs could widen crackspreads, particularly in the mid-Continent where differentials to WTI have already tightened. Valero’s Beaumont refinery complex, with 320,000 barrels per day of throughput capacity, stands to benefit meaningfully from narrower crude differentials.

Natural gas is bucking the crude-led selloff. Henry Hub futures are up 1.2% to $2.88 per million British thermal units on early-summer heat forecasts for the Texas grid and the Mid-Atlantic region. The EIA’s weekly storage report on Wednesday showed a 92-billion-cubic-foot injection, slightly below the five-year average, keeping the deficit narrative alive for the prompt month.

The floor under WTI is unclear below $80. The next significant technical support sits at $77.50 — the February 2026 low — followed by the $75 level that marked the post-tariff trough in January. A close below $80 on Friday would represent the first settlement under that threshold since April 8.