Crude oil prices witnessed heavy selling pressure in early Asian trade on Monday as optimism surrounding a potential US-Iran peace agreement weighed on global energy markets.
Investor sentiment improved after reports suggested progress towards reopening the Strait of Hormuz, a key global oil shipping route, prompting traders to reassess supply disruption risks in the region.
Brent crude futures for August delivery fell below the crucial $100 per barrel mark, while West Texas Intermediate (WTI) crude futures also registered steep losses.
Brent crude futures traded at $99.39 per barrel, down 0.82% in early trade. During the session, Brent touched a low of $94.82 per barrel, marking its weakest level in nearly three weeks.
Meanwhile, WTI crude futures declined 4.28% to $92.47 per barrel after falling as low as $90.93 during the trading session.
Oil prices extended losses from the previous week after signs emerged that diplomatic discussions between Washington and Tehran were making progress.
US President Donald Trump stated over the weekend that a memorandum of understanding related to a peace deal with Iran had been “largely negotiated”. The proposed agreement is expected to focus on reopening the Strait of Hormuz.
Reports also indicated that Pakistani mediators were involved in facilitating discussions between both sides. However, Iranian state media contradicted claims that a final agreement was close.
Trump later clarified that there was no immediate urgency to finalise a deal and confirmed that the naval blockade against Iran would remain in place until a formal agreement is reached.
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The Strait of Hormuz remains one of the world’s most strategically important oil transit routes, carrying a significant share of global crude exports.
Although hopes of reopening the waterway improved market sentiment, oil flows through the Strait of Hormuz continue to remain well below pre-conflict levels, keeping overall supply conditions relatively tight.
This ongoing supply constraint has helped prevent a steeper decline in crude oil prices despite improving geopolitical sentiment.
Despite signs of diplomatic progress, Washington and Tehran continue to disagree on several major issues, particularly Iran’s nuclear programme.
Iran has reportedly rejected US demands to surrender its enriched uranium reserves, remaining a key obstacle in the negotiations.
The continued uncertainty surrounding the nuclear dispute is expected to keep volatility elevated across global crude oil markets.
Crude oil prices remain under pressure as investors closely monitor developments surrounding US-Iran negotiations and the potential reopening of the Strait of Hormuz. While improving diplomatic sentiment has reduced immediate supply concerns, ongoing geopolitical uncertainties and restricted oil flows continue to support market volatility.
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Published on: May 25, 2026, 8:23 AM IST
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