Oil Prices Fall: Renewed Hopes for the Opening of the Strait of Hormuz

Market Overview

On May 25, 2026, financial markets opened with a notable decline in oil prices, a strong start for Wall Street futures, and gains in precious metals. This occurred on a US market holiday due to Memorial Day. Over the weekend, there were indications that a US-Iran agreement was nearing, although President Trump noted that finalization might take a few more days. Despite the lack of concrete changes, market sentiment was buoyed by the potential reopening of the Strait of Hormuz.

Current Prices

• Brent Crude: $94.43 (-5.75%)
• WTI Crude: $91.00 (approx.)
• Gold: $4,553.49 (+1.00%)
• Silver: $77.00 (+2.5%)
• S&P 500 Futures: 7,562.4 (+0.95%)

Details of the Potential Agreement

The leaked technical outline of the potential US-Iran agreement suggests a temporary resolution rather than a lasting peace. The draft proposes a 60-day extension of the current ceasefire, during which the Strait of Hormuz would be conditionally reopened for commercial tanker traffic, allowing Iran to temporarily sell its crude oil. In return, Iran has agreed to dispose of its stockpiles of highly enriched uranium, although the timeline and further restrictions on enrichment are yet to be negotiated.

Political Tensions and Challenges

Despite optimistic statements from US Secretary of State Marco Rubio, internal political tensions could derail the negotiations. Key issues include:

• Iran's demand for the immediate unfreezing of its financial assets, which the Trump administration has indicated is not included in the current agreement framework.
• The absence of direct restrictions on Iran's missile development and uranium enrichment, which has drawn criticism from American hawks.
• Pressure from Israeli Prime Minister Benjamin Netanyahu for a comprehensive agreement that eliminates the Iranian nuclear threat.

Logistical Challenges in Oil Supply

Even with an optimistic scenario of a signed agreement, restoring disrupted oil supply chains will take months. The ongoing conflict has blocked approximately 14 million barrels of oil per day, significantly impacting global oil and fuel supplies. The CEO of the UAE's state-owned oil company estimates that even if hostilities cease immediately, it will take at least four months to restore production to 80% of pre-war levels.

Price Forecasts

The current capital flight from crude oil contracts may be premature. If no substantial evidence supporting US optimism emerges, Brent crude prices could rise above $100 per barrel again. The depletion of global reserves remains a critical issue, with consumer nations having drained inventories at a record pace. The US Energy Information Administration forecasts an average Brent crude price of $89 per barrel by the end of 2026, while independent economists suggest that a real improvement in supply-demand balance may not occur until later in 2027.