Oil Prices Fall After US Considers Escorting Ships in Strait of Hormuz
NEW YORK - Global oil prices weakened at the close of trading on Thursday (7 May 2026) local time, or Friday morning (8 May 2026) WIB, amid volatile trading due to the latest developments in the Iran-US conflict.
The decline occurred after reports emerged that Saudi Arabia and Kuwait had lifted restrictions on US use of their airspace and military bases.
This move opens the possibility for Washington to resume commercial ship escort operations in the Strait of Hormuz starting this week.
Quoting Reuters, Brent crude oil fell $1.21, or 1.2%, to $100.06 per barrel. Meanwhile, US West Texas Intermediate (WTI) crude fell 27 cents, or 0.28%, to $94.81 per barrel.
In yesterday’s trading session, both global oil benchmarks even dropped as much as $5 per barrel due to optimism that Washington and Tehran are getting closer to a temporary agreement to halt the conflict.
Sources and related officials stated that the US and Iran are now closer to a limited and temporary agreement to stop the war. However, the draft agreement is said to still leave several of the most sensitive issues unresolved and does not lead to a comprehensive peace agreement.
SEB Research analyst Ole Hvalbye said that a truly reached agreement is likely to push oil prices further down.
“A confirmed agreement would likely bring Brent prices back to the $80 to $90 per barrel range quickly,” he said.
However, he warned that negotiation failures or a Trump shift back to military strike options could immediately drive oil prices sharply higher.
“If talks fail or Trump opts for strikes again, prices could surge above $120 per barrel,” Hvalbye said.
He added that while a memorandum of understanding could reduce the risk premium in futures markets, its impact on physical oil supplies would not be immediate. This is because the market needs weeks or even months to return to normal after an agreement is reached.
Meanwhile, Chinese media Caixin reported that a Chinese company’s oil products tanker was attacked near the Strait of Hormuz on Monday. This incident marks the first time a Chinese oil tanker has been targeted in an attack.
The impact of the Iran war also became the main topic at the ASEAN Summit in Cebu, Philippines, on 7-8 May 2026.
ASEAN countries once again called for unity in facing serious threats to their energy import-dependent economies.
In a draft statement obtained by Reuters, ASEAN leaders are scheduled to call for good-faith negotiations between the US and Iran, as well as an end to hostilities.