World Oil Prices Drop as Markets Welcome US-Iran Peace Prospects

World oil prices fell to a two-week low on Monday, 25 May 2026, as market optimism grew over the prospects of a US-Iran peace deal. Market participants highlighted the negotiations between the two countries, which could reopen the Strait of Hormuz, a vital global energy transit route that has long been a concern for investors. According to Reuters, Brent crude oil contracts fell 4.55% or US$4.71 to US$98.83 per barrel at 22:34 GMT. Both contracts touched their lowest level since 7 May 2026. US President Donald Trump said on Saturday, 23 May 2026, that Washington and Tehran had ‘largely finalised’ discussions for a peace agreement. The agreement is expected to reopen the Strait of Hormuz, a crucial global energy distribution route. Before the conflict, the Strait of Hormuz handled about one-fifth of global oil shipments and liquefied natural gas (LNG). On Sunday, 24 May 2026, Trump stated he had instructed US negotiators not to rush a deal with Iran. Negotiations on the details of the agreement are ongoing and may take several days to reach a final agreement from both sides. Earlier, US Secretary of State Marco Rubio also indicated there could be ‘good news’ regarding the Strait of Hormuz in the near future as peace talks between Washington and Tehran continue. The prospects of a US-Iran deal not only affected oil markets but also drove movements in global financial assets. World gold prices surged 1.6% to around US$4,580 per ounce, reversing some of last week’s losses.