Oil prices slump on report Iran could restore Hormuz traffic within a month

(Sharecast News) - Oil prices slid further on Wednesday afternoon following a report that Iran is committed to restoring the number of commercial transit ships through the Strait of Hormuz to pre-war levels within a month.

At 1338 BST, Brent crude was down 4.6% at $94.99 a barrel, extending losses.

According to Reuters, citing Iran's state TV, Tehran has obtained a draft of an initial unofficial framework for a memorandum of understanding with the US.

Under the framework, Iran would restore commercial shipping through the Strait of Hormuz to pre-war levels within a month, while the US would withdraw military forces from Iran's vicinity and lift a naval blockade.

According to Al Jazeera, which cited Iran's state broadcaster, US military vessels would not be covered under the draft arrangement for Hormuz, where ship traffic would be managed by Iran in coordination with Oman.

It also said the framework is not yet final and Iran would not move forward without "tangible verification".