Brent crude oil prices experienced their largest monthly decline in six years, dropping over 19% in May. This downturn is fueled by expectations of a potential deal between the U.S. and Iran, which could lead to the reopening of the critical Strait of Hormuz shipping route.
While President Trump has indicated progress toward an agreement, he has also laid out significant demands for Iran. Despite these hurdles, reports suggest a preliminary memorandum of understanding may be in place, pending presidential approval.
Brent Oil Plunges 19% in May, Hopes of U.S.-Iran Deal Weigh Heavily on Prices
New York, NY - International oil benchmark Brent crude experienced its most significant monthly loss in six years, plunging over 19% in May. This sharp decline is largely attributed to burgeoning optimism surrounding a potential deal between the United States and Iran, which could ease tensions and reopen vital shipping lanes.
An extended U.S.-Iran ceasefire is the 'worst-case scenario' for energy: Analyst
The international oil benchmark's 19% fall in May marks its worst monthly performance since March 2020, a period coinciding with the global economic shutdown triggered by the COVID-19 pandemic. Similarly, U.S. West Texas Intermediate (WTI) crude prices saw a substantial drop of nearly 17% in May, its poorest showing since April 2025.
Adding to the downward pressure, President Trump indicated that a final decision on an agreement with Iran might be imminent. He convened in the White House Situation Room to deliberate on the matter. However, Trump also outlined a series of demands that Iran has historically been unwilling to accept. These demands include Iran's commitment to never possess nuclear weapons, the immediate and unrestricted opening of the Strait of Hormuz in both directions without tolls, and the removal of any remaining mines in the strait. Furthermore, Iran would need to permit the U.S. to uncover and dismantle its enriched uranium reserves, which were reportedly damaged in previous U.S. and Israeli attacks.
Despite these stringent demands, U.S. officials revealed to CNBC that negotiators have reportedly reached a 60-day memorandum of understanding (MOU) aimed at extending the existing ceasefire and initiating discussions on Iran's nuclear program. The final sign-off from President Trump is still pending, according to officials. The news of the potential MOU was initially reported by Axios.
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An extended U.S.-Iran ceasefire is the 'worst-case scenario' for energy: Analyst
On Friday, the market reacted to these developments. West Texas Intermediate lost 1.73% to close at $87.36 per barrel, while Brent crude fell 1.77% to settle at $92.05 per barrel.
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