Oil prices slipped to two-week lows on Monday amid optimism that the United States and Iran were advancing toward a peace deal, despite ongoing disputes over critical issues such as Strait of Hormuz blockades that continue limiting Middle East oil supply.
Brent crude futures declined $4.71 (4.55%) to $98.83 per barrel by 2234 GMT, with U.S. West Texas Intermediate trading at $92.03, down $4.57 (4.73%).
Both contracts reached session lows not seen since May 7.
On Saturday, U.S. President Donald Trump stated that Washington and Iran had “largely negotiated” a memorandum of understanding regarding a peace deal intended to reopen the Strait of Hormuz — a critical waterway previously handling one-fifth of global oil and LNG shipments.
Despite ongoing disagreements on several complex issues, Trump indicated on Sunday that he instructed his representatives not to rush into any agreement with Iran.
Despite ongoing caveats and risks to the peace deal and Strait of Hormuz, MST Marquee analyst Saul Kavonic noted there is now some hope of near-term oil price relief.
Analysts anticipate it will take months for oil flows through the strait to normalize and for damaged oil and gas infrastructure to be repaired.
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