Global Economy — 2026-05-25

Oil Prices Drop Five Dollars Per Barrel on Signs of US-Iran Deal as Hormuz Reopening Could Take Months

BLUFEven if Washington and Tehran sign within days, Hormuz is unlikely to fully reopen by August 23, as de-mining and inventory restocking impose physical timelines negotiations cannot compress.

Brent crude fell about 5% to near $98 per barrel Sunday evening after Trump posted that U.S.-Iran negotiations were proceeding in "an orderly and constructive manner" 123. Trump added in the same post that the deal was "not even fully negotiated yet" and that the U.S. would not rush, with senior U.S. officials telling Fortune that final approval could take several days 13. Iran's Tasnim news agency reported the draft could still collapse over unresolved clauses, including the U.S.'s refusal to unfreeze Iranian assets 3. ClearView Energy Partners warned in a Sunday client note that de-mining the strait and evacuating trapped tankers alone could take weeks to months after any agreement, with restoring pre-war output levels and restocking inventories potentially requiring multiple calendar quarters 2.

Analysis
Full reopening of the Strait of Hormuz by August 23 is unlikely even if Washington and Tehran sign within the coming week. De-mining, clearing trapped tankers, and restarting Gulf production runs weeks to months, with inventory restocking adding multiple calendar quarters. Unresolved clauses, including Tehran's demand for frozen-asset releases, retain real capacity to collapse the draft before signing, a risk corroborated across CNBC, Fortune, Bloomberg, and Axios from separate editorial angles. High confidence rests on three independently observable signals: Trump's own statements confirm the deal remains unsigned, Iran's state media names active sticking points, and the de-mining timeline is a physical constraint no diplomatic text can alter. The $5 oil drop may instead price supervised or partial passage as a threshold decoupled from full reopening, which would mean markets are underweighting residual supply risk. Asian energy ministers face a late-June decision on costly long-term emergency supply contracts with no confirmed timeline in view.

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