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Crude oil futures drop after Trump promises an Iran deal will be signed Friday
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Special Series Middle East conflict Conflict in the Middle East has been escalating. These stories provide context for current developments and the history that led up to them.
Camila Domonoske
A ship remains anchored on May 16, 2026 in the Strait of Hormuz near Larak Island, Iran. Majid Saeedi/Getty Images Europe hide caption
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Climate The Iran war created a global natural gas shortage — a windfall for U.S. companies Trump's initial post on Sunday evening said he was authorizing "the toll free opening of the Strait of Hormuz," and directed ships to "start your engines." Before the war, approximately 20% of the world's oil and liquefied natural gas passed through that waterway, and the disruption of traffic has caused the greatest oil supply shock in history.
In a follow-up post, Trump later said that the strait would reopen "upon the signing of the Deal on Friday, for purposes of mine removal."
Throughout this conflict, oil prices have repeatedly fallen on headlines promising an imminent deal to reopen the strait; however, they've never dropped this low. Significantly, Pakistan's Prime Minister Shehbaz Sharif, who has played a central role negotiating between the U.S. and Iran, has confirmed that a deal has been reached.
Energy Drive slower, go electric, don't drive at all? The best options for saving gas A rapid reopening of the strait would ease pressure on the world's oil consumers, particularly in Asia and Europe. However, it would not mean an immediate return to pre-war oil supply levels and prices.
"It could be months before things return to something like the way things were before the war, at least as far as flows out of the Strait of Hormuz go," says Kevin Book, a managing director at Clearview Energy Partners, an independent research firm. That's because some oil and natural gas production fields and refineries have been taken offline, or damaged in the conflict. "The facilities that have been shut down, some of them can start fairly quickly. There's a much bigger problem looming Transit takes time, too. Ships also need to move in and out of the strait, and from there around the world.
And over the past few months, the world has tapped into its stockpiles of oil in order to make up for missing supplies; refilling those inventories could keep upward pressure on oil prices for months.
Before the war began, the world had been oversupplied with oil, which was keeping prices low. Book says it's not clear whether returning to "normal" will mean returning to that status quo.
"It's not obvious that we'll be in a surplus any time soon," he says.
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− Crude oil prices sank on Sunday night after President Trump posted on social media that a deal to end the war with Iran was "complete."
Middle East conflict The U.S.
+ Crude oil prices are down sharply on Monday morning, after President Trump, Iranian leaders and Pakistani negotiators all indicated that a deal to end the war with Iran will be signed on Friday.
Middle East conflict The U.S.
− and Iran announce a deal to end the war Oil futures markets promptly dropped 4%, after markets reopened for trading following their typical weekend break.
+ and Iran announce a deal to end the war President Trump posted online about the deal on Sunday evening.
− Prices had already fallen significantly on Thursday and Friday in anticipation of a deal, bringing the per-barrel price of crude Sunday night down 12% from where it had been in the middle of last week.
+ Oil futures prices promptly sank around 4%, after markets reopened for trading following their typical weekend break. Prices had already fallen significantly on Thursday and Friday in anticipation of a deal.
− Brent crude, the global benchmark, is now below $84 a barrel, and West Texas Intermediate, the U.S.
+ By Monday, prices were down nearly 13% from where it had been in the middle of last week.
− benchmark, beneath $81.
+ The cost of one barrel of Brent crude, the global oil benchmark, was around $83, and West Texas Intermediate, the U.S.
− At one point in this conflict, global oil prices had touched $126 a barrel.
+ benchmark, around $80.
− They remain elevated compared to pre-war prices, which were in the $60s, but are now cheaper than they have been at any point since the very first days of this conflict.
+ At one point in this conflict, global oil prices had touched $126 a barrel.
+ While prices remain elevated compared to pre-war prices, which were in the $60s, they are now cheaper than they have been at any point since the very first days of this conflict.
+ "Washington has an incentive to avoid a spike in gasoline prices ahead of the midterms, while Tehran is seeking sanctions relief and restored export revenues, and the global economy has a strong interest in keeping the Strait of Hormuz open," writes Claudio Galimberti, the chief economist for the research firm Rystad Energy, in a note. "On rare occasions, these incentives align in a coherent way, and that is the strongest argument that this is more than another short-lived diplomatic cycle,"
While risks remain, Galimberti says, a reopening of the strait would begin to reduce global inflationary pressures, which have been mounting.
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− Others may take months."
Business Trump wants a gas tax holiday.
+ Others may take months," he said.
Business Trump wants a gas tax holiday.