By Editorial Dept - May 29, 2026, 6:30 AM CDT
July WTI crude oil suffered its largest weekly decline in months as traders aggressively removed geopolitical risk premium from the market on growing hopes that diplomacy between Washington and Tehran could eventually succeed. Through Thursday, May 28, July WTI crude oil traded between a high of $94.70 and a low of $87.11 before settling at $88.60, down $8.40, or 8.66%, for the week.The selloff was notable because it occurred while many of the bullish supply factors that drove crude sharply higher earlier this year remained in place. Traffic through the Strait of Hormuz remains severely disrupted, inventories continue to decline, and significant production losses across parts of the Middle East have yet to be restored. Under normal circumstances, those conditions would be expected to support prices. Instead, traders spent most of the week looking beyond current supply shortages and focusing on the possibility that a ceasefire agreement could eventually bring barrels back to market.Diplomacy Finally Gains the Upper HandFor much of the year, every headline involving Iran pushed crude oil higher. Traders repeatedly bought futures on fears that military escalation would threaten exports, shipping routes, and energy infrastructure throughout the region. This week marked one of the first times the opposite occurred.Early in the week, crude prices remained supported by reports of continued military exchanges between the United States and Iran. Concerns…
