International oil benchmarks have experienced a significant downturn, with Brent crude posting its largest monthly loss in six years. During the month of May, Brent prices plummeted by more than 19%, marking the most severe monthly decline since the global economic disruptions of March 2020. Similarly, U.S. West Texas Intermediate (WTI) saw a nearly 17% drop, reflecting heightened volatility in the energy sector.

The downward trend is largely attributed to market anticipation regarding a potential diplomatic breakthrough between the United States and Iran. Traders are closely watching developments as the U.S. administration evaluates a possible agreement that could lead to the reopening of the Strait of Hormuz. The prospect of increased stability in this critical maritime corridor has significantly influenced pricing models.

Despite the momentum toward negotiations, several high-stakes demands remain central to the discussion. The U.S. has signaled that any agreement must include a commitment from Tehran to forgo nuclear weapons, the immediate removal of mines in the Strait of Hormuz, and the guarantee of unrestricted, toll-free passage for international traffic. Additionally, issues regarding the management and destruction of enriched uranium remain a primary point of contention.

While negotiators have reportedly drafted a 60-day memorandum of understanding to extend the current ceasefire and initiate formal talks on Iran’s nuclear program, the final decision rests with the White House. As the market awaits a formal signature, Brent crude settled at $92.05 per barrel, while WTI closed at $87.36 per barrel.