Oil just had its worst month in six years — and the deal responsible doesn’t even have a signature.

Brent crude plunged more than 19% in May, closing Friday at $92.05 a barrel. West Texas Intermediate shed nearly 17%, settling at $87.36. Brent posted its steepest monthly loss since the Covid-19 crash in March 2020, while WTI saw its worst month since April 2025, according to CNBC.

The driver isn’t a signed treaty or a reopened shipping lane — it’s the expectation of one. US officials told CNBC that negotiators have hammered out a 60-day memorandum of understanding to extend a ceasefire with Iran and begin talks on its nuclear program. Trump still has to sign off. Iranian state media says the deal hasn’t been finalized. And on Friday, Trump laid out demands — including that Iran never pursue a nuclear weapon, open the Strait of Hormuz without tolls, and allow the US to destroy its enriched uranium — that Tehran has rejected before.

None of that has stopped traders from pricing in a reopened Strait of Hormuz, the chokepoint carrying roughly a fifth of the world’s oil and LNG. Iran declared the strait “completely open” for the ceasefire’s duration. Shipping groups aren’t convinced. BIMCO, the international shipping body, warned that mine threats remain unclear and advised operators to consider avoiding the area. One oil and gas shipper told the BBC the announcement “doesn’t change anything” immediately.

The collapse is a break for consumers hammered by months of surging fuel costs. Brent traded below $70 before the US-Israel war on Iran began in February, then spiked above $119 in March, according to BBC data. UK petrol and diesel prices have started to ease, according to motoring group RAC, though filling a tank remains far more expensive than before the conflict.

Whether the relief holds is another matter. Capital Economics noted that the current ceasefire offers only a “narrow window” for tankers to transit. If Trump walks away from the deal — or Iran balks at his demands — the market has a long way to climb back up.

Sources