Oil Prices Drop, Investors Monitor US-Iran Peace Negotiations
Oil prices fell on Thursday (May 22nd) as investors hoped the US and Iran could reach a deal that would prevent an escalation of war in the Middle East. US crude fell nearly 2% to close at $96.35 per barrel, while Brent fell more than 2% to $102.58 per barrel.
Prices rose more than 3% earlier in the session after Reuters reported that Iran's Supreme Leader, Ayatollah Mojtaba Khamenei, ordered enriched uranium to remain domestically. Khamenei's position is seen as complicating negotiations with the US, which has emphasized dismantling Iran's nuclear program as a primary goal of the war effort.
US President Donald Trump had previously postponed airstrikes against Iran to allow time for diplomacy, at the request of Gulf allies. Trump warned of the possibility of resuming military action if Iran did not provide "100% correct answers," but was willing to wait a few more days for negotiations.
Shipping through the Strait of Hormuz remains disrupted by Iran's blockade, a crucial trade route for global oil supplies. The head of the International Energy Agency (IEA), Fatih Birol, warned that the oil market could enter a "red zone" this summer if the Strait of Hormuz is not reopened, as global oil stocks dwindle while demand increases as the summer progresses.
Variables to monitor: developments in US-Iran negotiations, oil flows through the Strait of Hormuz, Brent and WTI prices, and global supply data.
Source: Newsmaker.id
