Global Oil Prices Plunge as US-Iran Peace Talks Bring Relief

Global oil prices fell significantly on Friday’s trade (29 May 2026) as investor hopes grew for an end to the US-Iran armed conflict. This decline has placed the energy commodity on track for its largest monthly drop in history. According to market data, global benchmark Brent crude fell 1.3% to $91.54 per barrel. Cumulatively, Brent has dropped nearly 17% since early May. Meanwhile, US-focused West Texas Intermediate (WTI) fell 1.4% to $87.64 per barrel, a 7% decline from this week’s peak of $94.70. Market optimism was triggered by Donald Trump circulating a draft peace agreement for the Iran conflict to allies. Axios reported that the US and Iran have tentatively agreed to extend the ceasefire for 60 days. However, the report added that Trump has not yet fully approved the final terms. US Vice President JD Vance stated the agreement is not yet fully finalised but is very close. The 90-day conflict triggered global economic turmoil, particularly after Iran responded by closing the Strait of Hormuz. The closure of this vital shipping route halted much of the Gulf’s oil exports, one of the world’s key oil-producing regions. The drop in energy prices has eased concerns for the global economy, which had been threatened by stagflation – a condition of stagnant growth alongside high inflation. Henry Allen of Deutsche Bank noted investors are now dismissing the worst-case scenario for the global economy. This sparked a strong rally in Asian stock markets: In Europe, the UK’s FTSE 100 opened 0.1% higher, while the Stoxx Europe 600 rose 0.3%. The positive trend followed the S&P 500 in the US hitting a new record high. In the bond market, the yield on US 10-year Treasuries fell to 4.45%. The decline reflects investors’ expectations of lower future inflation as international energy prices ease.