Oil Prices Head Towards the Largest Monthly Drop in 6 Years

Boosted by market confidence that the U.S. and Iran are set to reach a peace agreement, international oil prices continued to decline on Friday, potentially recording the largest single-month drop since March 2020.

The Wall Street Journal, citing a U.S. official, reported that the U.S. and Iran are close to striking a 60-day agreement. Under the agreement, both parties will jointly lift the blockade on the Strait of Hormuz within the first 30 days. The report indicates that this will be the first part of a multi-stage framework, with the U.S. hoping to use it to induce Iran to reduce its nuclear program over the coming decades.

U.S. Treasury Secretary Scott Bessent said on Thursday that the U.S. and Iran may currently possess the groundwork for an agreement. He emphasized that everything depends on the decision of the president, and President Donald Trump would never sign a bad deal.

In terms of price performance, the international benchmark Brent crude oil futures fell by 0.1% today, to $92.56 per barrel; West Texas Intermediate (WTI) crude oil futures in the United States also declined by 0.1%, to $88.79 per barrel. Both crude benchmarks have plummeted by about 15% this month, but still retain a cumulative increase of over 50% year-to-date for 2026.

Dow Jones market data shows that Brent crude has fallen by about $18 since May, marking the largest single-month drop in absolute dollar terms since March 2020; WTI fell by $16 in this month, creating the most intense dollar drop since November 2021.

Previously, due to new exchanges of fire between the U.S. and Iran overnight, which threatened the fragile ceasefire between the two countries, oil prices had surged by more than 4% in the early morning of Thursday. However, as reports about reopening the Strait of Hormuz agreement emerged, oil prices then fluctuated and fell back, ending the day with only a slight increase.