Oil prices fall again as possible US-Iran deal eases market fears

In particular, Brent crude oil futures fell by 35 cents (-0.37%), dropping to $93.36 per barrel. Meanwhile, US crude oil futures fell by 63 cents (-0.71%), bringing the price to $88.27 per barrel.

Reuters notes that prices have fallen by more than 8% over the past week. Meanwhile, the price of Brent crude fell to a low of $87.11, down from last week’s high of $109.47.

The agency also adds that prices have shown high volatility in recent days, fluctuating by as much as $6 for both indices amid conflicting signals about a possible end to the war and the potential reopening of the Strait of Hormuz.

Currently, the volume of traffic through this maritime bottleneck remains negligible compared to the number of ships that passed through before the war against Iran began.

What influences oil prices

On the night of May 25–26, the US military attacked Iranian boats and air defense systems in the south of the country, as the Iranians attempted to lay mines in the Strait of Hormuz and opened fire on US aircraft.

In addition, on the night of May 28, it became known that the US had again struck a military facility that posed a threat to US forces and commercial shipping in the Strait of Hormuz. Furthermore, the Americans shot down several drones.

Against the backdrop of these events, oil prices rose. However, the situation was defused by a framework agreement to extend the ceasefire, which, according to media reports, was agreed upon on May 28.

The agreement stipulates that the ceasefire will last another 60 days, during which time the parties must ensure free navigation through the Strait of Hormuz and resolve the issue of Iran’s nuclear program. Once these issues are resolved, a final agreement will be signed.

However, the catch is that US President Donald Trump has taken a few days to decide whether to accept the agreed-upon framework agreement or not.