Oil drops to $89 a barrel down from $107 after Iran state media reports Strait of Hormuz to open in a month

Oil prices have fallen to $89 a barrel this week after Iran reported that a peace deal with the US would reopen the Strait of Hormuz in a month. The news comes after the Trump administration has been working to put together a resolution to the conflict that began on February 28.

Crude oil prices were around $89 on Thursday but were up over $107 a week ago. The nearly 6 percent decrease in price comes amid market volatility in reaction to the tensions between the US and Iran going on in the Middle East.

According to the New York Post, an Iranian state TV report on Wednesday aired a draft of an unofficial framework for a memorandum of understanding (MOU) to end the conflict. The MOU has said that Iran would open up the Strait of Hormuz for commercial shipping through the key waterway where 20 percent of the world's oil supply must traverse.

The MOU framework set up the deal such that the US would end the naval blockade and the strait would open in a month. However, the framework for the deal has not been finalized. President Trump also raised concerns over a possible deal when some in Congress said that the outline did not address issues with Iran's nuclear program.

According to the Iranian state TV report, the regime said that it would not take any steps on the nuclear program without "tangible verification."

Over the last several weeks, prices on US oil have gone up and down depending on the news cycle. When signs of a deal being reached have been released, the price has tended to go down and vice versa when tensions have heated up.