Oil dips amid reports of potential US-Iran ceasefire deal

• Brent crude prices swung from a weekly high of $109.47 to a low of $87.11, reflecting volatility over the three-month Iran conflict and closure of the Strait of Hormuz, which handles roughly one-fifth of global oil and LNG supplies
• Vice President JD Vance stated the U.S. is 'close' but 'not there yet' on a deal with Iran, with sticking points remaining on Tehran's enriched uranium stockpile and enrichment questions
• Traffic through the Strait of Hormuz remains a fraction of pre-war levels, and any final agreement requires approval from President Trump and has not been finalized by Iranian state media

Oil Prices Dip on US-Iran Ceasefire Hopes

Market Movement:

Oil futures declined on May 29 amid optimism over a potential US-Iran ceasefire extension. Brent crude futures (July) fell 35 cents (0.37%) to $93.36 per barrel, while US oil futures dropped 63 cents (0.71%) to $88.27. The more actively traded August Brent contract decreased 46 cents (0.50%) to $92.24.

Weekly Performance:

Prices dropped more than 8% for the week, with Brent hitting a low of $87.11 compared to the previous week's high of $109.47. Recent sessions have shown extreme volatility, with both benchmarks swinging as much as $6 on conflicting ceasefire signals.

Geopolitical Context:

The US and Iran reportedly agreed Thursday to extend their ceasefire and lift restrictions on shipping through the Strait of Hormuz, though the deal awaits final approval from President Donald Trump and Iranian officials. The strait, critical for transporting roughly one-fifth of global oil and liquefied natural gas supplies, currently operates below pre-war traffic levels due to the three-month conflict.

Key Developments:

Vice President JD Vance stated the US is "close" to a deal but "not there yet," citing sticking points over Iran's enriched uranium stockpile and enrichment capabilities. He expressed cautious optimism while noting Washington's ability to substantially set back Tehran's nuclear program if negotiations fail.

Market Implications:

The potential reopening of the Strait of Hormuz would ease supply concerns that have driven recent price volatility. However, uncertainty surrounding final deal approval and remaining negotiation hurdles continue to support prices and prevent sharper declines.