Global oil prices tumbled by around 20 per cent from 2026 highs in May as investors grew increasingly optimistic on prospects for a long-lasting ceasefire deal between the U.S. and Iran, which would unlock shipping through the Strait of Hormuz.
Brent crude was down 1.2 per cent on the final trading day of the month, at $92.56, as of 11:18 a.m. in London. The international price benchmark plunged almost 19 per cent in May, having suffered its worst month since the Covid-19 pandemic. Meanwhile, the U.S. West Texas Intermediate (WTI) futures prices fell 16.5 per cent month-to-date, and were last seen almost 1.9 per cent lower at the weekend at $87.18.
Energy prices have skyrocketed since the war began on February 28. Seaborne crude has largely been prevented from passing through the Hormuz Strait, the critical shipping lane between Iran and Oman, which accounted for about 20 per cent of global energy supply before the conflict.
The U.S. and Iran are understood to have “mostly agreed” on the terms of a 60-day memorandum of understanding to extend the ceasefire, though the deal still needs sign-off from President Donald Trump.
Despite renewed prospects for peace, strikes continued Thursday last week, with Iranian forces firing ballistic missiles at Kuwait and sending attack drones towards the Strait.
