World oil prices fall amid US-Iran peace hopes

WASHINGTON — World oil prices fell below $100 per barrel on Monday (25 May 2026), with stock markets rising amid hopes that the United States (US) and Iran are moving closer to a peace deal. The global benchmark Brent crude futures contract dropped 6% to $97.43 per barrel.

According to The Guardian, this marks the lowest level in two weeks as hopes grow for a deal to end the nearly three-month conflict between the US, Israel, and Iran.

However, despite the framework of an agreement being negotiated, the US and Iran remain at odds over key issues such as Iran’s blockade of the Strait of Hormuz.

An Iranian government spokesperson warned that the deal “is not likely to happen soon.” The de facto closure of the Strait of Hormuz previously triggered a surge in energy prices after the US and Israel launched missile strikes on Tehran on 28 February.

Warren Patterson, ING’s chief commodities strategist, told Reuters that markets are likely to remain cautious in responding to the negotiations.

“We have been here before, but talks ultimately failed. Therefore, markets are likely to be more cautious about overreacting,” Patterson said.

Even if the Strait of Hormuz reopens, analysts say it could take months for oil flows to normalise, as damaged energy infrastructure in Qatar and other regions still needs repair.

Last week, Barclays maintained its forecast for this year’s average Brent crude price at $100 per barrel, though the bank noted there remains a risk of higher prices.