Oil slid to six-week low as US - Iran ceasefire hopes ease supply fears

Global crude oil benchmarks tumbled on Friday, 29 May 2026, extending their losses to six-week lows as renewed optimism over a potential ceasefire between the United States and Iran eased concerns over supply disruptions in the Middle East.

Brent crude futures for July delivery, which expired on Friday, settled at $92.05/barrel, down $1.66 or 1.8% from the previous session.

WTI crude fell $1.54, or 1.7%, to close at $87.36 per barrel.

The sharp decline came after reports that the United States and Iran had reached a tentative agreement on Thursday to extend an existing ceasefire by another 60 days while easing restrictions on shipping through the Strait of Hormuz. The development fuelled hopes that traffic through the strategically vital waterway could gradually resume, alleviating fears of prolonged disruptions to global energy supplies.

Crude oil prices had already been trending lower throughout May amid growing speculation that both sides would eventually reach some form of accord. Market participants viewed the latest diplomatic progress as a sign that tensions could continue to de-escalate, reducing the geopolitical risk premium that had supported prices earlier in the month.

However, analysts cautioned that significant uncertainties remained despite the apparent breakthrough. Previous rounds of negotiations had produced similar optimism before faltering, resulting in prolonged deadlock between the two sides.

In the meantime, shipping activity through the Strait of Hormuz remained well below pre-conflict levels. Several vessels transiting the maritime chokepoint had reportedly come under attack in recent days, highlighting the persistent security risks facing shipowners and energy traders in the Persian Gulf regardless of whether a formal peace agreement is ultimately reached.

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