Oil falls more than 5% with expectations of an agreement between the US and Iran

Oil prices fell more than 5% this Monday (25) and reached their lowest level in two weeks, amid increased optimism that the United States and Iran are close to a peace agreement.
Despite this, the two countries still disagree on important points, such as the reopening of the Strait of Hormuz.
At around 7:46 am (Brasília time), the price of a barrel of Brent oil fell 5.51%, to US$ 94.69. US West Texas Intermediate (WTI) oil fell 5.81% to US$90.99 per barrel.
On Saturday, US President Donald Trump stated that Washington and Iran had "extensively negotiated" an understanding for a peace agreement that would allow the reopening of the Strait of Hormuz, a route through which about a fifth of global oil and liquefied natural gas exports passed before the conflict.
Still, the two sides remain at odds over issues considered central. On Sunday, Trump said he had instructed his representatives not to accelerate the negotiations.
"We have seen this scenario before, but the negotiations ended up failing. Therefore, the market must remain cautious and avoid exaggerated reactions," said Warren Patterson, head of commodity strategy at ING.
This Monday, the two countries also reduced expectations of a quick advance in the talks. US Secretary of State Marco Rubio said that Washington hopes to reach a "good agreement" with Iran or will adopt "another approach".
Iranian Foreign Ministry spokesman Esmaeil Baghaei said that the country is negotiating an end to the war and that, at this moment, it is not dealing with nuclear issues.
Analysts estimate that the normalization of oil flow through the strait will still take months, while damaged oil and gas installations undergo repairs.
"We continue to believe that the main factor for the oil market is the physical flows of the commodity and, so far, traffic through the Strait of Hormuz remains limited," said Giovanni Staunovo, an analyst at UBS.
According to navigation data, two tankers loaded with liquefied natural gas left the Strait of Hormuz this Monday bound for Pakistan and China.
In addition, a supertanker loaded with Iraqi oil left the Gulf for China on Saturday, after being detained for almost three months.
In the United States, companies in the energy sector reacted to the rise in domestic prices by increasing, for the fifth week in a row, the number of oil and natural gas platforms in operation - something that has not happened since February 2025.
The total number of drilling platforms, an indicator of future production, increased by seven units in the week ending 22 May, reaching 558, the highest level since June 2025.
Still, Baker Hughes reported that the number remains eight platforms below that recorded in the same period last year.

Source: G1

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