Crude oil prices fall 6% amid reports of US-Iran deal nearing

Crude oil prices fell 6% on May 25 to their lowest level in two weeks amid growing confidence that the United States and Iran are moving closer to a peace deal.

At the same time, key disagreements, including over the blockade of the Strait of Hormuz, remain, Reuters reported.

Brent crude futures fell $5.85, or 5.7%, to $97.69 a barrel by 03:43 GMT. U.S. West Texas Intermediate crude fell $5.75, or 6%, to $90.85 a barrel, down $5.75, or 6%, from the previous session. Both contracts fell to their lowest levels since May 7.

“Despite all the caveats and risks surrounding the peace deal and the Strait of Hormuz, there is now a light at the end of the tunnel that could provide some relief for oil prices in the near term,” said MST Marquee analyst Sol Kavonic.

However, the parties are still at odds on a number of difficult issues, and Trump stressed on Sunday that he had instructed his representatives not to rush into any agreements with Iran.

“We’ve been through this before, but the talks broke down then. So the market is likely to remain cautious about overreacting,” said Warren Patterson, head of commodities strategy at ING.

Analysts predict that it could take several months for oil supplies to return to normal while repairs are made to damaged oil and gas infrastructure.

“The longer the crisis drags on, the more acute the question becomes of whether world leaders truly want a quick end to the conflict,” said Phillip Nova analyst Priyanka Sachdeva.

Tags: prices