US-Iran Agreement Expected to Thaw, International Oil Price Plunges Over 5%, Market Prices in Early Restart of the Strait of Hormuz

BlockBeats News, May 25th. Due to the expected impact of the US-Iran agreement nearing completion, international oil prices opened sharply lower on May 25th. At the time of writing, both WTI crude oil and Brent crude oil futures have fallen by over 5%. Earlier, Trump stated that the US-Iran negotiations are "getting closer" to reaching an agreement. Although he later emphasized that the agreement was "not yet fully negotiated," the market had already begun trading on the expectation of easing geopolitical risks.

Analysts pointed out that the core reason driving the oil price drop is the market's expectation that the Strait of Hormuz will gradually return to normal. Iran revealed that in the past 24 hours, 33 vessels, including oil tankers, have smoothly passed through the Strait of Hormuz, indicating a significant improvement in the strait's shipping conditions compared to before.

Longzhong Information analyst Yan Wu stated that the preliminary formation of a US-Iran peace agreement has sent a long-awaited positive signal to the market. Meanwhile, Jinlianchuang analyst Han Zhengji believes that if the agreement is finally reached, with the fading of geopolitical premiums, international oil prices still have room for further decline. However, if the situation deteriorates again, oil prices could quickly rebound.

However, several analysts have emphasized that there is still a supply gap in the global oil market. As the production of many Gulf countries has not yet returned to normal levels, and with the northern hemisphere about to enter the summer fuel consumption peak season, oil prices may remain volatile at high levels in the short term. Yan Wu predicts that from June to August, the price of Brent crude oil may range between $87 and $110 per barrel.