The price of Brent crude fell 9% in trading on May 6, with quotes dropping below $100 a barrel.
At one point, the July Brent futures contract on ICE Futures fell to $99.84 a barrel, before stabilising around the $100 mark.
The market reacted this way to reports that the United States and Iran had moved closer to an agreement to end the war.
According to Axios, Washington and Tehran are close to signing a short memorandum of understanding that would formalise the end of hostilities in the Middle East and set a framework for further negotiations over Iran’s nuclear programme. The White House expects Iran to present its response to the document’s key provisions within the next 48 hours. No final agreement has yet been reached.
Brent Crude ($ Per Barrel)
The oil market remains highly sensitive to news about the US war with Iran because the Strait of Hormuz has been effectively closed since the conflict began. Before the fighting started, one-fifth of global oil supplies passed through it. At the peak of the war, the price of a barrel of oil rose above $120.