Brent Crashes Below $100 — 5.8% Drop on Iran-Deal Optimism, Thin Holiday Trade
Brent crude futures dropped $6.01, or 5.8%, to $97.53 a barrel by 11:25 GMT, the lowest level since 7 May. West Texas Intermediate fell 5.9% to $90.95. Both contracts hit lows not seen in over two weeks as traders unwound the war-risk premium linked to the Strait of Hormuz. UK and US markets were closed for the Spring Bank Holiday and Memorial Day, leaving trade thinner and volatility higher than usual. Gold prices jumped 1% as the dollar softened. Traders are weighing how much Middle East supply shock remains priced in if talks make material progress this week.
Brent finished Friday at $103.54 after a sharp weekly loss of 5.48% for Brent and 8.37% for WTI. Phil Flynn, senior analyst at Price Futures Group, called the pace of news “hard to keep up” with. The main risk remains the Strait of Hormuz. Before fighting began, about 20% of the world’s oil and liquefied natural gas shipments transited the strait; current volumes are a small fraction of that. ING analysts wrote in a note to clients: “There appears to have been some tempering of optimism. Obviously, the big unknown is how the US and Iran will resolve their differences on Iran’s nuclear program.” Brent at $84-90 would be the price level consistent with a confirmed, signed deal that reopens the strait at scale; the current $97 level reflects partial optimism with substantial residual risk.