On Monday, May 25, global oil prices dropped by 6%, reaching their lowest levels in the past two weeks. The decline was driven by optimistic expectations regarding a potential peace agreement between the United States and Iran.
This is reported by Finway
Details of changes in the oil market
Brent crude oil futures fell by $5.85, or 5.7%, reaching $97.69 per barrel. American oil West Texas Intermediate (WTI) lost $5.75, or 6%, with a price of $90.85 per barrel. Both grades have dropped to their lowest values since May 7.
The price drop is linked to news of progress in negotiations between Washington and Tehran regarding a peace agreement, which could potentially allow for the full resumption of oil exports through the Strait of Hormuz—a strategically important route for global energy resources.
Expert assessments and future prospects
“Despite all the warnings and risks that remain regarding the peace agreement and the Strait of Hormuz, there is now a light at the end of the tunnel that will bring some short-term relief in oil prices,” said MST Marquee analyst Sol Kavanagh.
However, the negotiation process remains complex: the parties have significant disagreements on a number of issues. US President Donald Trump emphasized on Sunday that he has instructed his representatives not to rush into an agreement with Iran.
Warren Patterson, head of commodity strategy at ING, notes that the market is showing caution, as similar situations have occurred before, but negotiations have fallen through. Analysts predict that it will take several months for a full resumption of oil supplies through the Strait of Hormuz, as the restoration of damaged oil and gas facilities requires time.
Phillip Nova analyst Priyanka Sachdeva emphasizes that the prolonged crisis complicates the question of global leaders’ intentions regarding the swift restoration of stability in the market.
Meanwhile, American energy companies are actively responding to the domestic rise in energy prices by increasing the number of drilling rigs for oil and gas extraction.
Recall that on May 22, oil prices temporarily rose due to investor skepticism regarding a potential breakthrough in peace negotiations between the US and Iran.