Brent crude oil experienced its largest monthly decline in six years, plummeting over 19% in May amid rising speculation that the U.S. and Iran are moving closer to a deal that could reopen the crucial Strait of Hormuz. West Texas Intermediate (WTI) also faced significant losses, dropping nearly 17% during the month, marking its worst performance since April 2020. This downturn was exacerbated on Friday as President Trump announced a meeting to finalize negotiations, with WTI closing at $87.36 per barrel and Brent at $92.05.

The implications for the oil market are considerable, as any agreement that allows for unrestricted traffic in the Strait could lead to increased supply and downward pressure on prices. However, Trump’s demands—such as Iran’s commitment to nuclear non-proliferation and the removal of mines—remain contentious and have been previously rejected by Tehran, adding uncertainty to the negotiations.

Market professionals should closely monitor the evolving situation, as a finalized agreement could significantly impact oil supply dynamics and pricing in the coming months.

Source: cnbc.com