London / New York — May 29–30, 2026: Global oil markets posted one of their most dramatic single-month reversals in years on Friday, with Brent crude dropping to a six-week low near $92 a barrel as traders aggressively priced in the possibility of a US-Iran ceasefire deal that could reopen the Strait of Hormuz — the critical waterway through which roughly 20% of the world's daily oil supply flows. The month of May 2026 will go down as one of the most volatile in energy market history.

The Numbers: A Historic Monthly Collapse

Global oil prices have tumbled by around 20% from their 2026 highs as investors have grown increasingly optimistic about prospects for a long-lasting ceasefire deal between the U.S. and Iran, which would unlock shipping through the Strait of Hormuz.

Brent crude futures fell more than 1% on Friday to $92.67 a barrel, and were on track for their steepest weekly decline since early April. Brent plunged 10.5% in the week alone — the steepest weekly drop since the week of April 6 — while WTI fell 9.2%, its biggest weekly loss since mid-April. For the full month of May, Brent posted a decline of nearly 19% — the biggest monthly drop since 2020, when the COVID-19 pandemic collapsed global energy demand.

For live Brent crude and WTI prices, futures curves, and global energy market data, the U.S. Energy Information Administration (EIA) is the most authoritative public source for oil market statistics and analysis.

What's Driving the Selloff: The 60-Day MOU

U.S. and Iranian negotiators reached a 60-day memorandum of understanding to extend the ceasefire and start negotiations over Iran's nuclear program — with President Trump still needing to approve the MOU, according to U.S. sources who spoke to CNBC. The deal framework, first reported by Axios, includes:

  • Full reopening of the Strait of Hormuz to prewar commercial traffic levels
  • Iran's obligation to clear all naval mines from the Strait within 30 days
  • Gradual lifting of the U.S. naval blockade as Iran fulfills commitments
  • Launch of formal nuclear talks under the ceasefire umbrella

Oil prices fell further on Friday after President Trump said he would meet in the White House Situation Room to make a final decision about a deal with Iran — a statement traders interpreted as imminent resolution, sending additional sell orders into an already falling market.

The Broader Context: From $110 to $92 in Six Weeks

Energy prices had skyrocketed since the war began on February 28, 2026. Seaborne crude was largely prevented from passing through the Hormuz Strait — the critical shipping lane between Iran and Oman, which accounted for about 20% of global energy supply before the conflict. At its wartime peak, Brent had surged above $110 per barrel. The 19% May decline brings it back toward the $92 handle — still well above pre-war levels of roughly $72.

The truce between the US and Iran remains fragile, with both sides accusing the other of breaching it. The proposed 60-day deal would guarantee free passage through the waterway, with Tehran clearing mines within 30 days — but Washington has ruled out near-term sanctions relief and insists Iran will not have control of the strait.

Demand Side: Asian Buyers Are Pulling Back Too

The ceasefire optimism is not the only force weighing on crude. Saudi Aramco is expected to cut its July Asian official selling prices, reflecting weaker Dubai quotes and thin refining margins. Chinese purchases from Saudi Arabia are sliding to about 600,000 barrels per day by end-June, down from 1.6 million barrels per day in February, with refinery runs weakening. The demand side of the oil equation is deteriorating simultaneously with the supply-side ceasefire narrative — a doubly bearish combination for prices.

Three Scenarios for Oil Prices in June 2026

  • Trump signs the MOU — ceasefire holds: Brent could fall further toward the $85–$88 range as Strait of Hormuz mine clearance begins and tanker traffic resumes. OPEC+ may also face pressure to cut production to defend prices.
  • Deal collapses or stalls: Brent likely rebounds sharply above $100 as war risk premium returns. Energy inflation pressures reignite — forcing the Fed's hand on rates.
  • Partial deal, fragile truce continues: Oil trades in a volatile $90–$100 range as markets price the binary outcome day by day — the most likely near-term scenario given the complexity of the negotiations.

For investors, the message from May's oil collapse is clear: the market is no longer pricing in a prolonged war premium. The question now is whether diplomacy can deliver what traders are already betting on — and whether the world's most critical energy chokepoint can truly reopen without further military escalation.