Markets spent Friday morning betting on peace. The two governments spent it calling each other liars.
Stocks in Europe climbed on the deal hopes. The Stoxx 600 rose 1.8%.
Most big markets added about 2%. Oil went the other way.
U.S. crude fell about 1.6%. Oil futures tied to Brent fell about 1.8%.
The reason is simple. About a quarter of the world's shipped oil moves through the Strait of Hormuz.
The strait also carries about a fifth of the world's natural gas. So any deal would ripple across energy markets, not just oil.
When that much supply might come back, traders price in cheaper oil. Prices drop before a single barrel even moves.
Airlines and shippers cheer cheaper fuel. Oil producers feel the squeeze.
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Iran's state media reported a 14-point draft. It has the U.S. lift oil sanctions, end its naval blockade, and free up frozen funds.
In return, Iran would reopen Hormuz within 30 days. The draft also asks U.S. forces to leave Iran.
And it calls for a rebuild plan worth at least $300 billion. Trump shot the report down fast.
He wrote that the leaked terms "have NOTHING to do with the terms that were agreed to, in writing." He called the Iranians "very dishonorable people to deal with."
He also blasted a drone attack overnight on Indian ships leaving the strait. India says three of its sailors have been killed near the Gulf in recent weeks.
The same morning, India summoned a U.S. diplomat over those attacks.
Israel has not signed on to the draft. Its defense minister wants Trump to keep Iran from getting nuclear arms.
He also said Israel won't pull its troops from nearby states. Trump said he spoke with Israel's leader about the plan this week.
Keep some salt handy, though. Trump has said a deal is close more than 30 times since the war began four months ago.
Bloomberg reported a signing could happen in Switzerland as soon as Sunday. That would land near next week's G7 summit.
Trading on an unsigned deal is like cheering a job offer before the contract shows up. That risk is why some traders still reach for safe-haven gold when the news swings.
For now, the gap between talk and a signed page is wide.
Oil and stocks now ride on a deal no one has signed. Moves this sharp can reverse just as fast.
If the talks stall this weekend, Friday's rally could unwind by Monday.
Watch the G7 meeting for any signing. Watch oil and airline stocks if it falls apart.
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