Crude Oil Prices Decline as US-Iran ‘Truce’ Continues; Brent Faces Largest Monthly Drop Since 2020

After a tentative agreement was reached between the US and Iran to extend a truce for 60 days, allowing shipments through the Strait of Hormuz to resume, oil prices saw a slight decline.

West Texas Intermediate hovered around $88, while Brent fell towards $93 per barrel, dropping 18% this month. Following an Axios report stating that shipping via the Strait would be “unrestricted”, a source indicated that President Donald Trump has not yet consented to the agreement’s terms.

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Despite the warring parties reporting progress repeatedly, only to sustain the deadlock, Brent is projected to face its largest monthly decline since 2020, fueled by hopes of a potential agreement.

With millions of barrels of oil supply curtailed, the effective closure of Hormuz, which is under pressure from Washington and Tehran, has triggered an unprecedented global energy crisis.

Several hurdles could hinder oil flows from resuming even if a truce extension is finalized. These include the need to clear mines from the Hormuz waterway, the likelihood that it may take months to reactivate shut-in fields, and the requirement to repair energy infrastructure damaged by drone and missile attacks. Additionally, it would take weeks for vessels to reach importing nations.