Oil prices tumble 3% on potential for US-Iran deal and higher inventories

Pound, gold and oil prices in focus: commodity and currency check, 15 May

Updated Thu, May 15, 2025, 2:58 AM 4 min read

Oil (BZ=F, CL=F)

Oil prices slid more than 3% on Thursday morning, amid expectations of a potential nuclear deal between the US and Iran.

Brent crude futures (BZ=F) dropped 3% to $64.08 a barrel, while West Texas Intermediate futures (CL=F) fell 3.5% to $60.92 a barrel.

In an interview with NBC News on Wednesday, Ali Shamkhani, a top adviser to Iran's supreme leader, said that Iran was ready to sign a nuclear deal with the US with certain conditions.

In exchange for an immediate lifting of economic sanctions on Iran, Shamkhani reportedly said that Iran would commit to never making nuclear weapons and would agree to dispose of its stockpiles of highly enriched uranium, as well as to enrich uranium to levels only needed for civilian use and allow inspectors to supervise this process.

The comments came just hours after US president Donald Trump said that he wanted to make a deal with Iran but added that it must "permanently and verifiably cease pursuit of nuclear weapons", speaking during his visit to the Middle East.

The US on Tuesday imposed fresh sanctions on companies that it said had been sending Iranian oil to China.

Meanwhile, data released by the US Energy Information Administration on Wednesday showed that US crude stockpiles increased by 3.5 million barrels to 441.8 million barrels last week. That was much higher than an increase of 1.1 million barrels anticipated by analysts polled by Reuters.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "Falling oil prices have put pressure on listed energy giants, as concerns about oversupply in the market swirl.

"Just as traders were processing data that showed a big surge in US crude stockpiles, the potential for a US-Iran deal is increasing forecasts of a glut in global oil supplies," she said.

"BP (BP.L) has fallen by more than 4% and Shell (SHEL.L) is down 2.7% in early trade as lower oil prices weigh on their valuations."

Gold (GC=F)

Gold prices also fell on Thursday, amid continued investor optimism around easing trade tensions.

Gold futures (GC=F) declined 1.2% to $3,150.40 per ounce on Tuesday morning, while the spot gold price fell 0.9% to $3,148.39 per ounce at the time of writing.

News that at the start of the week that the US and China had agreed to cut tariffs on each other's imports by 115% for 90 days dented the appeal of gold as a safe-haven asset.

This de-escalation of trade tensions has boosted investors' outlook for the economy and led to expectations that the US Federal Reserve make fewer interest rate cuts than previously expected.

In turn, this prompted a sell-off in US Treasurys, pushing yields — which are effectively the interest rates on these debt instruments — higher.

Jim Reid, market strategist at Deutsche Bank (DBK.DE), said: "The bond sell-off came amid an ongoing reversal in Fed rate cut expectations, with fed funds futures moving to price less than two cuts by year-end for the first time since February.

"That came as Fed speakers struck a measured tone, with San Francisco Fed president Daly saying that 'the word of the day is patience' while Chicago Fed president Goolsbee said that a 'solid hard data economy is still there' beneath the recent noise."

Higher bond yields tend to weigh on gold prices, given that the precious metal is a non-yielding asset.

Pound (GBPUSD=X, GBPEUR=X)

The pound edged higher against the dollar (GBPUSD=X) in early European trading, up 0.2% to trade at $1.3286, following data that showed better-than-expected UK economic growth.

According to the Office for National Statistics, the UK's gross domestic product (GDP) grew by 0.7% in the first quarter of 2025, which was ahead of market estimates of 0.6%. This was also a marked improvement of the 0.1% growth recorded over Christmas.

Danni Hewson, head of financial analysis at AJ Bell, said: "There’s no question that the economy looks a whole lot more robust than many people had expected considering the gloom that permeated perception in the wake of last year’s budget.

“Growth has been resilient and significant despite concerns about the impact of increased employment costs and uncertainty linked to Donald Trump’s tariffs. Whilst not quite matching last year’s first quarter, it has come in way above what had been expected."

Stocks: Create your watchlist and portfolio

Meanwhile, the pound was little changed against the euro (GBPEUR=X), which was trading at €1.1858 at the time of writing.

More broadly, the FTSE 100 (^FTSE) was down 0.2% at 8,569 points. For more details, check our live coverage here.

Read more: