Brent crude, the global benchmark, slid to just below $94

Oil prices were little changed after a volatile trading day as traders digested news that Iran and the US have reached a tentative deal to extend a ceasefire and work toward a pact to end the war.

Brent crude, the global benchmark, slid to just below $94. Prices earlier swung between gains and losses.

Axios reported that the memorandum of understanding would extend the ceasefire for 60 days and state that shipping through the vital Strait of Hormuz would be “unrestricted,” without any tolls paid to Iran. The US president still needs to give his consent to the terms and has asked for “a couple of days” to decide, according to the report.

An agreement to extend the truce would represent a diplomatic breakthrough and potentially bring Iran and the US closer to resuming normal maritime traffic through the strait, which usually carries around a fifth of the world’s oil and liquefied natural gas supply.

Resuming flows through the chokepoint would help alleviate a months-long energy crisis that has sent fuel costs surging internationally. But further intensive negotiations over would be needed to reach a final peace deal, even if a preliminary pact is reached.

I remain very cautious around a potential deal, but we will see if any confirmations come and if flows actually pick up through the strait, said Ryan McKay, senior commodity strategist at TD Securities. Regardless of if the deal is real, inventory declines are set to persist for months.

An Iranian lawmaker and member of the country’s parliamentary commission for national security, said the negotiations have shown “significant progress” and that the US has accepted most of Iran’s demands, according to the semi-official Iranian Students’ News Agency.

The US still has to decide on a number of Iran’s conditions, the ISNA quoted the lawmaker as saying, without giving details.

The news of a potential deal, which followed overnight clashes between Iran and the US, overshadowed an US Energy Department report showing that the country’s crude stockpiles declined by 3.3 million barrels last week.