Oil prices dropped over 4% recently, hitting two-week lows. This decline comes amid growing optimism for a potential peace deal between the U.S. and Iran. However, significant disagreements still linger, especially concerning the Strait of Hormuz, a major route for oil shipments.
Brent crude futures fell by $4.44 to $99.10 a barrel, while U.S. West Texas Intermediate futures dropped $4.36 to $92.24 a barrel. Both benchmarks reached their lowest levels since early May.
Recently, President Trump mentioned that the U.S. and Iran had nearly come to a consensus on a deal that could reopen the Strait of Hormuz. Before the conflict, this strait was responsible for about 20% of global oil and natural gas shipments. Yet, Trump has noted that he doesn’t want to rush negotiations.
Warren Patterson, an expert in commodities at ING, expressed caution, stating, “We’ve seen this before, where talks seemed close but broke down.” He believes the market will remain careful about getting too optimistic.
On Monday, U.S. Secretary of State Marco Rubio commented that a good deal is essential, but if not, the U.S. would approach Iran “in another way.” Meanwhile, Iran’s foreign ministry spokesperson clarified that current discussions focus on ending hostilities, not nuclear matters.
Experts speculate that restoring normal oil flows through the strait will take months, especially as damaged facilities are repaired. Giovanni Staunovo from UBS highlighted that ongoing restrictions on oil flows continue to impact the market.
Despite the challenges, two liquefied natural gas tankers recently departed the Strait, on their way to Pakistan and China. Additionally, an Iraqi crude supertanker left the Gulf for China after being stranded for almost three months.
In response to rising local energy prices, U.S. energy companies have added more oil and natural gas rigs for the fifth consecutive week. The rig count rose by seven to a total of 558, marking the highest level since June 2025. However, this still reflects a decrease of eight rigs, or 1%, compared to the same time last year.
As we continue to monitor these developments, they show how intertwined global markets are with geopolitical issues and energy supply routes. For more details on oil market trends, visit Reuters.
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Iran, Strait of Hormuz, Donald Trump, peace deal, U.S. West Texas Intermediate, Oil prices
