May 29: Crude oil prices declined by around 1% in recent trading sessions as markets reacted to reports of a possible extension of the US–Iran ceasefire, easing concerns over potential supply disruptions from the Middle East.
The prospect of reduced geopolitical tension helped calm fears about crude supply risks, particularly around key global shipping routes such as the Strait of Hormuz. As a result, the risk premium that had recently supported oil prices weakened, leading to a mild correction.
However, analysts caution that sentiment remains fragile, as the ceasefire extension has not been formally confirmed by all stakeholders. Any setbacks in negotiations could quickly reverse the current price trend, given the sensitivity of energy markets to developments in the region.
Overall, the decline reflects cautious investor positioning as markets balance improving geopolitical signals with lingering uncertainty. Despite the recent softness, crude prices continue to be shaped by evolving global political and economic conditions, suggesting continued volatility ahead.