Brent Oil Price Update: Big fall in crude, price fell by 5% and came below $100, know what is the US-Iran peace deal?

Business Desk – Brent Oil Price Update: As America and Iran are getting closer to signing a Memorandum of Understanding (MoU) to end their ongoing conflict. Crude oil prices fell during early Asian trading on Monday, May 25.

Brent crude fell more than 5%, falling below the $100 level for the first time this month, while US crude or West Texas Intermediate (WTI) saw a similar decline. It stabilized at the level of $90 per barrel. At the start of the trading session, both contracts had reached their lowest levels since May 7.

On Saturday, US President Donald Trump said Washington and Iran have “substantially negotiated” a memorandum of understanding regarding a peace deal. The agreement will pave the way for the reopening of the Strait of Hormuz, a vital waterway that before the conflict handled one-fifth of global oil and liquefied natural gas (LNG) shipments.

However, there remains disagreement between the two sides on many controversial issues. As a result, Trump indicated on Sunday that he has instructed his representatives not to rush into any deal with Iran.

Harris Khurshid, chief investment officer at Chicago-based Khurshid Capital LP, said large amounts of oil had been traded based on fears of a worst-case scenario for weeks. He further said, but as it became clear that negotiations are still ongoing. The tension is not increasing, a large part of that fear is gone very quickly.

The reopening of the Strait of Hormuz will be a huge relief for many oil importers, given that one-fifth of the world’s oil supply passes through the Persian Gulf. Iran claims that more than 33 ships have already passed through this strait.

However, it is expected to take at least a month for traffic levels to return to normal levels seen before the conflict. White House chief economic adviser Kevin Hassett told Fox News that he expects energy prices to fall once a deal is reached, which could help the US Federal Reserve lower interest rates. Due to public holidays in America and United Kingdom, trading in oil markets may also remain sluggish on Monday.