- Crude Falls Sharply Below $100 as Traders See Light at End of Hormuz Crisis
Oil prices fell to their lowest level in two weeks on Monday as markets reacted to signs that the United States and Iran may be moving closer to a peace deal, easing fears over prolonged disruption to oil and gas flows through the Strait of Hormuz.
Brent crude futures dropped $4.71, or 4.55 per cent, to $98.83 a barrel by 2234 GMT, while US West Texas Intermediate fell $4.57, or 4.73 per cent, to $92.03 a barrel. Both contracts touched their lowest levels since May 7 earlier in the session.
The fall reflects a shift in market sentiment after weeks of elevated prices triggered by the US-Israel conflict with Iran, which had limited marine traffic through the Strait of Hormuz and restricted oil supply from the Middle East.
The Strait of Hormuz remains one of the world’s most important energy corridors. Before the conflict, it carried about one-fifth of global oil and liquefied natural gas shipments, making any disruption a major source of risk for energy-importing economies.
Media reported that US President Donald Trump said Washington and Tehran had “largely negotiated” a memorandum of understanding on a peace deal that would reopen the Strait of Hormuz. However, the two sides remain divided over several difficult issues, with Trump also saying he had instructed US representatives not to rush into any deal with Iran.
The mixed signals left traders balancing near-term optimism against unresolved geopolitical risk.
MST Marquee analyst Saul Kavonic said there was now “some light at the end of the tunnel,” despite caveats and risks still surrounding the peace deal and the Strait of Hormuz. He added that this could bring near-term oil price relief.
Still, analysts cautioned that even if a deal is reached, it could take months for oil flows through the strait to return fully to normal and for damaged oil and gas facilities to be repaired.
For oil-importing countries such as Ghana, the price decline could offer temporary relief if sustained. Lower crude prices would reduce pressure on fuel import costs, transport fares and broader inflation, especially at a time when energy costs remain one of the key risks to the inflation outlook.
But the relief remains fragile. Any breakdown in talks or renewed escalation around the Strait of Hormuz could quickly reverse the decline and push oil prices higher again.
The development comes as global markets continue to assess the wider economic impact of the Middle East conflict, including its effects on shipping, energy supply, fertiliser flows and inflation in developing economies.
For Ghana and other net fuel importers, the latest drop in prices may ease immediate pressure, but it does not remove the underlying vulnerability. As long as the Strait of Hormuz remains a live geopolitical flashpoint, energy prices will remain exposed to sudden reversals.
The oil market may have found temporary relief in peace-deal optimism. But the durability of that relief will depend on whether diplomacy can move faster than the risks still hanging over one of the world’s most critical energy routes.
