Oil prices drop today and are heading for monthly losses that are the worst in a year

Crude oil prices recorded a decline of more than 1% during the last sessions of May, on Friday, as fears of escalating tensions between the United States and Iran subsided. Additionally, crude contracts are on track to suffer their worst monthly loss since April 2025.

In this regard, sources told Reuters that the United States and Iran reached an agreement on Thursday to extend the ceasefire for 60 days, which enhanced optimism about the possibility of reopening the Strait of Hormuz soon, and thus, the return of crude oil supply flows.

Shipping restrictions through the Strait of Hormuz are also expected to be lifted, although U.S. President Donald Trump has not yet granted his final approval. Meanwhile, Iranian state media confirmed that the agreement has not yet been finalized.

However, U.S. Vice President J.D. Vance told reporters that it is too early to know when or if an agreement with Iran will be reached, while Axios reported earlier that shipping through the strait would be unrestricted.

In this context, Al Arabiya reported on Friday that Iran agreed to subject its nuclear facilities to international oversight, in a move said to aim at avoiding the dismantling of these facilities.

The sources cited in the report added that many points related to files surrounding the Iranian nuclear program were resolved during the latest rounds of negotiations with the United States, which restored optimism in the markets regarding the end of the conflict in the Middle East and the return of crude oil supplies through the Strait of Hormuz, leading to a decline in oil prices during trading.

Movements in Crude Oil Prices

Regarding today’s trading, Brent crude futures for August delivery fell by about 2.01%, reaching $90.84 per barrel. Additionally, prices of West Texas Intermediate crude for July delivery declined by approximately 2.02%, trading near the level of $87.10 per barrel.

It can be observed that crude oil prices are heading for significant weekly losses as this week's trading draws to a close, with total losses of oil estimated at about 9.8% for Brent and 9.95% for West Texas Intermediate since the beginning of the week.

As we approach the end of May sessions, oil is on track to record monthly losses, marking the worst since April 2025, with losses amounting to about 15.61% since the beginning of the month until now.