Oil Prices Slump to Six-week Low as US, Iran Near Peace Deal

Emmanuel Addeh in Abuja 

Oil prices fell 6 per cent to two-week lows yesterday, as optimism grew that the United States and Iran were moving closer to a peace deal, even though they remain at odds over key issues, such as blockades on the Strait of Hormuz.

Brent crude futures fell $5.85 or 5.7 per cent, to $97.69 a barrel in early morning trading, while US West Texas Intermediate was at $90.85 a barrel, down $5.75, or 6 per cent. Both contracts touched their lowest since May 7 earlier in the session.

On Saturday, US President Donald Trump said Washington and Iran had “largely negotiated” an understanding on a peace deal that would reopen the Strait of Hormuz, which had carried a fifth of global shipments of oil and liquefied natural gas before the conflict.

However, the two sides remain at odds on several difficult issues, with Trump saying on Sunday he had told his representatives not to rush into any deal with Iran.

“We’ve been at this stage before, only for talks to break down. Therefore, the market will likely be more cautious about overreacting,” said Warren Patterson, head of commodities strategy at ING.

A Reuters report quoted analysts as saying they expect a return to normal oil flows through the strait will take months, while damaged oil and gas facilities are repaired.

While Nigeria continues to struggle to raise production, the report said US energy firms responded to higher local energy prices by adding oil and natural gas rigs for the fifth week in a row, for the first time since February 2025.