Oil prices decline on news of US-Iran negotiations over Strait of Hormuz

Oil prices fell by approximately 5% to 6% on May 25, 2026, as markets reacted to potential negotiations between the United States and Iran. Discussions center on a peace deal that could reopen the Strait of Hormuz, a strategic route for global energy supplies that has been effectively closed since February 28, 2026. Brent crude dropped to between $97 and $99 per barrel, while WTI crude fell to between $90 and $92 per barrel. Despite reports of progress, U.S. President Donald Trump indicated on May 24 that Washington is not rushing to reach an agreement, citing unresolved concerns regarding Iran's nuclear program. Analysts remain cautious, noting that previous rounds of talks have historically collapsed. If the strait reopens by early June, JPMorgan analysts project an average price of $97 per barrel for the remainder of the year. This development follows a period of record-high fuel costs, with U.S. gasoline prices averaging $4.51 per gallon during the Memorial Day weekend.