Global crude oil prices tumbled to their lowest levels in two weeks on Monday, 25 May, as optimism over a potential breakthrough in US-Iran negotiations eased fears of prolonged supply disruptions in West Asia. Both major benchmarks fell sharply, with Brent crude slipping below the closely watched $100-per-barrel threshold for the first time in weeks.

How Far Prices Fell

International benchmark Brent crude dropped 6% to trade below $100 per barrel, while US West Texas Intermediate (WTI) crude declined more than 6% to $90.33 during early trade. Both benchmarks touched their weakest levels since early May.

Notably, Brent had surged to a peak of $115.30 per barrel earlier this month as markets priced in supply risks and tightening global inventories. From 4 May to 25 May, the benchmark declined by nearly 15% — a sharp reversal that analysts are watching closely.

What Triggered the Selloff

The slide followed remarks by US President Donald Trump, who indicated that Washington and Tehran had made significant progress toward a possible peace understanding aimed at easing regional tensions and reopening the Strait of Hormuz. Trump said the two sides had 'largely negotiated' the contours of a deal.

Oil prices had surged sharply in preceding months after tensions escalated between the US, Israel, and Iran, disrupting flows through one of the world's most critical energy chokepoints. This latest diplomatic signal marks a potential turning point, though uncertainty persists.

Critical Issues Still Unresolved

Despite the optimism, Trump acknowledged that several critical issues remain unresolved and indicated that Washington was not rushing to finalise an agreement. Analysts noted that while prices have slipped below the $100 mark on deal expectations, the market remains fragile.

Leading global brokerages warned that the oil market stays vulnerable if disruptions in the Strait of Hormuz continue for an extended period. The strait previously carried around one-fifth of global oil and liquefied natural gas shipments before the conflict disrupted supplies earlier this year.

Why the Strait of Hormuz Matters

The Strait of Hormuz is one of the world's most strategically important energy routes, serving as the primary export corridor for crude oil from the Persian Gulf. Any sustained closure or disruption directly impacts global supply chains, energy costs, and inflation trajectories — particularly for import-dependent economies like India.

This is the first time since early May that Brent has traded below $100, and if the diplomatic momentum holds, analysts suggest it could emerge as a structural shift in near-term energy markets. All eyes are now on the next round of US-Iran talks.