Crude oil prices experienced a decline of over 4 percent in futures trading on Monday, following a significant selloff in global markets. This drop was fueled by growing optimism regarding a potential breakthrough in discussions between the United States and Iran, which may lead to the reopening of the strategically vital Strait of Hormuz.
On the Multi Commodity Exchange (MCX), crude oil for June delivery fell by Rs 412, or 4.49 percent, reaching Rs 8,756 per barrel with a trading volume of 13,313 lots. Analysts attributed the decrease to easing geopolitical tensions and expectations of resumed oil flows through the Strait of Hormuz.
According to reports, a general framework has been established between Iran and the United States aimed at resolving their ongoing conflict, which has persisted for over two months. However, the specific arrangements concerning the management of the Strait of Hormuz remain unconfirmed. Despite advances in discussions, analysts caution that a definitive agreement between Tehran and Washington cannot be considered imminent.
In international markets, Brent crude futures fell below the USD 100 per barrel threshold, with a decrease of USD 4.80, or 4.79 percent, bringing the price to USD 95.41 per barrel. West Texas Intermediate crude also saw a notable decline, dropping USD 5.07, or 5.25 percent, to USD 91.53 per barrel on the New York Mercantile Exchange (NYMEX).
Recent reports from a senior White House official indicated that a framework agreement has been reached, potentially allowing for resumed operations in the Strait of Hormuz, a crucial global shipping lane through which approximately one-fifth of the world’s oil is transported. The Strait has been largely closed to tanker traffic for weeks, contributing to rising oil prices and fears of significant inflationary pressures worldwide. Under the proposed deal, the U.S. is expected to lift its naval blockade on Iranian ports.
Despite the potential for a peace agreement, analysts warn that even if an accord is reached promptly, restoring normal oil flows through the Strait could take several months. This suggests that energy prices may not revert to pre-conflict levels immediately.
In related developments, former President Donald Trump stated he had directed negotiators “not to rush into a deal,” emphasizing that the American blockade on Iranian ports would remain in place until a finalized and certified agreement is achieved.
The sharp decline in crude oil prices has positively influenced global equity markets, with stock indices in Europe and Asia rising on expectations that lower energy prices could alleviate inflationary pressures and mitigate risks to global economic growth.
Published on May 25, 2026.
