- Brent crude futures fell by $5.04 in a single day, a decrease of 4.9%, to $98.50 per barrel; U.S. West Texas Intermediate crude futures dropped by $4.82, a decline of 5%, to $91.78, both hitting a two-week low since May 7.
- U.S. President Donald Trump stated that Washington and Iran have basically reached a consensus on the framework of a peace agreement, intending to reopen the Strait of Hormuz, which accounts for one-fifth of the world's shipping capacity, but later clarified that there was no rush to formally sign the agreement.
- The Baker Hughes weekly report shows that the number of active oil and gas drilling rigs in the U.S. increased by 7 from the previous week, reaching a total of 558, the highest since June 2025, marking the fifth consecutive week of growth.
Real-time Price Fluctuations
Refinitiv high-frequency data shows that on Monday, crude oil futures experienced systematic devaluation. At 13:27 GMT, both major benchmark crude contracts fell to a marginal range of about 5%. Due to expectations of a memorandum extending the ceasefire by 60 days and reopening the strait emerging from U.S.-Iran diplomatic channels, there was a concentrated closing of long positions by investment banks, causing the previously high forward contract curve, inflated by geopolitical premiums, to shift downward at the near end. Although there were reports of an Iranian delegation arriving in Doha for technical consultations, prices, after hitting a two-week low, have not yet received strong bullish buying support.
Diplomatic Mediation and Policy Variables
The geopolitical game is at a critical stage of expectation reconstruction. Trump sent positive signals to the media over the weekend, claiming that the framework agreement is basically agreed upon, directly exerting high pressure on international oil prices at Monday's opening. However, policy uncertainty is maintained through his subsequent conditional statements, emphasizing no intention to hastily finalize the text. Meanwhile, Iranian Foreign Ministry spokesman Esmail Baghaei, in a routine statement on Monday, deliberately separated the current ceasefire negotiations from nuclear issues. This complex policy tone indicates that although there may be marginal improvements in short-term navigation conditions, long-term geopolitical trust has not been fully established.
Reassessment of Forward Supply Exposure
Monitoring of physical cargo flows and supply gaps continues to provide underlying support for the market. Sparta Commodities' refined model shows that the current situation in the Strait of Hormuz, causing a daily supply gap of 10 to 11 million barrels of crude oil, is difficult to fully compensate for in the short term by other alternative routes, with global energy inventories in a phase of continuous depletion. UBS analyst Giovanni Staunovo also pointed out that the core focus should be on physical oil flows rather than diplomatic statements. Although satellite shipping data shows that two LNG carriers headed for Asia on Monday, and an Iraqi supertanker detained for three months has set sail, the physical repair of damaged maritime facilities typically requires several months, meaning that the forward supply side remains tightly priced.
