Oil Prices Crash 6% as US, Iran Move Closer to Peace Deal
By Aboki Forex —
Oil prices plunged 6% to two-week lows on Monday. Markets reacted to growing optimism that the United States and Iran are nearing a peace agreement. Brent crude fell $5.85 to $97.69 per barrel. US West Texas Intermediate dropped $5.75 to $90.85 per barrel.
US President Donald Trump said on Saturday that Washington and Iran have largely negotiated an understanding. The deal would reopen the Strait of Hormuz. Before the conflict, the strait carried one-fifth of global oil and liquefied natural gas shipments.
“Notwithstanding all the caveats and risks, there is now some light at the end of the tunnel,” said Saul Kavonic, analyst at MST Marquee. He said this would bring near-term oil price relief.
But the two sides remain at odds on key issues. Trump said on Sunday he told his representatives not to rush into any deal. The US blockade stays in place for now.
“We’ve been at this stage before, only for talks to break down,” said Warren Patterson, head of commodities strategy at ING. He warned the market should be cautious about overreacting.
Analysts expect a return to normal oil flows through the strait will take months. Damaged oil and gas facilities need repairs. “The longer the crisis stretches, the more debatable it becomes whether world leaders genuinely want a quick end to disruptions,” said Priyanka Sachdeva, analyst at Phillip Nova.
Meanwhile, US energy firms added oil and natural gas rigs for the fifth week in a row. The rig count rose by seven to 558 in the week to May 22. That is the highest since June 2025. Baker Hughes said the total count is still down eight rigs, or 1%, from a year ago.
“Momentum indicators suggest markets are attempting to stabilise after last week’s aggressive selloff, but conviction remains weak,” Sachdeva added.