Oil bounces off lows after Iran says deal reached with Oman to share revenue from Hormuz

Oil prices came back from session lows Wednesday after Iran's hard-line Revolutionary Guard said Tehran has reached a deal with Oman on the Strait of Hormuz.

Iran and Oman have agreed to share revenue generated from Hormuz, a Revolutionary Guard spokesman told the state news agency Tasnim. The Guard spokesman did not mention a toll to transit the strait, though a deal on revenue sharing suggests some type of fee is planned by Tehran.

Brent crude futures, the international benchmark, traded about 1% lower to $87.74 a barrel. U.S. West Texas Intermediate crude dropped 0.7% to $81.74 per barrel.

Oil fell more than 3% earlier in the session as the U.S. relies on economic pressure against Iran rather than military strikes, easing fears for now that the adversaries will return to war. Prices are down more than 5% for the week.

Iran and Oman will share control of Hormuz under their agreement, the Guard spokesman said. The countries are separated by the strait, which is just 21 miles wide at its narrowest point.

The Revolutionary Guard said the U.S. has tried to obstruct a deal between Iran and Oman. Washington must accept the agreement for Hormuz to reopen, the spokesman said.

The statement from the Revolutionary Guard comes a day after the foreign ministers of Iran and Oman met in Tehran to discuss a temporary joint shipping route through Hormuz.

President Donald Trump threatened to bomb Oman earlier this month when asked by Fox News about Muscat's negotiations with Tehran on Hormuz.

Trump has claimed the U.S. controls Hormuz as the military helps ferry tankers through the strait along Oman's coast. U.S. Central Command told CNBC last week that 660 million barrels of crude oil have exited Hormuz since May under military protection.