Global Oil Prices Plunge Again as Ceasefire Eases Tensions

Global oil prices plummeted this week as investor concerns eased following the potential continuation of the Iran-US ceasefire. According to Refinitiv data on Friday (29 May 2026), Brent crude fell 1.77% to $92.05 per barrel, while West Texas Intermediate (WTI) dropped 1.73% to $87.36 per barrel. For the week, Brent declined 11.1% and WTI fell 9.57% point-to-point.

The decline signals relief in energy markets as geopolitical tensions subside, reversing the volatility seen in crude prices over recent weeks linked to Middle East conflicts. The initial two-week ceasefire between the US and Iran began on 8 April 2026 following intense military escalation in the region.

Markets initially reacted cautiously, but the agreement proved durable through multiple extensions. A temporary deal announced on 28 May proposed a further 60-day ceasefire extension, a more substantial commitment than the previous two-week extension.

The initial ceasefire halted direct attacks on regional infrastructure. The extended agreement signals both parties’ commitment to alleviating supply disruption concerns.

Historically, ceasefire extensions have reduced crude oil volatility, as seen in previous regional de-escalations. However, traders remain cautious due to the fragile nature of negotiations and ongoing minor violation reports.

Citigroup noted that oil markets are finding greater stability as investors reduce fears of worst-case energy supply disruptions. Nevertheless, uncertainty around the timing of a final agreement keeps global central banks alert to inflation risks from energy price spikes.

Citi also warned that prolonged oil price increases are beginning to generate broader inflationary pressures, which could prompt central banks to adopt tighter or more hawkish monetary policies.