Published May 26th, 2026 - 09:02 GMT
ALBAWABA- Global oil prices fell sharply on May 25–26, 2026, after U.S. President Donald Trump signaled that a comprehensive agreement with Iran could be announced soon, easing concerns over supply disruptions in the Strait of Hormuz.Brent crude, the global benchmark, dropped more than 4.5%–5%, sliding below $100 per barrel to around $95–$98. West Texas Intermediate (WTI) also declined, trading near $91–$93 per barrel, marking one of the steepest single-day losses in recent weeks.The sell-off followed Trump’s comments that a deal with Iran had been “largely negotiated,” including provisions for reopening the Strait of Hormuz to unrestricted shipping, extending the current ceasefire by 60 days, and advancing discussions on Iran’s nuclear program alongside potential sanctions relief. He later urged negotiators not to “rush,” while describing the talks as constructive.Market sentiment shifted on expectations that a diplomatic breakthrough could restore stable energy flows through the Strait of Hormuz, a critical chokepoint handling roughly one-fifth of global seaborne oil trade. Investors had previously priced in significant risk premiums due to tensions in the region and reported maritime incidents involving Iranian forces and U.S. military responses.The latest decline reflects easing fears of prolonged disruption to global oil and liquefied natural gas (LNG) shipments, particularly following weeks of volatility driven by clashes in and around southern Iran and the Gulf.The potential agreement is being treated as a major de-risking event for global energy markets, with the prospect of normalized shipping routes helping to cool inflation expectations across import-dependent economies in Asia and Europe.However, traders remain cautious. Ongoing mistrust between Washington and Tehran, combined with continued reports of ceasefire violations, means markets remain highly sensitive to any setbacks in negotiations. Any delay or breakdown in talks could quickly reverse recent price declines.
