U.S. oil prices drop after Trump announces potential Iran nuclear agreement progress

Brent crude, the worldwide standard, reached a mid-afternoon trading price of $64.6 per barrel, while West Texas Intermediate Crude was recorded at $61.7 per barrel.

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2025 May 24 . 3:56 AM

2 min read

Global benchmark Brent crude oil was valued at $64.6 per barrel in the afternoon, while West Texas... — Global benchmark Brent crude oil was valued at $64.6 per barrel in the afternoon, while West Texas Intermediate Crude maintained a price of $61.7 per barrel at the same time.

U.S. oil prices drop after Trump announces potential Iran nuclear agreement progress

Oil Prices Slump Amid Nuclear Deal Talks

By Thursday afternoon, oil prices plunged up to 3% following President Trump's comment that the U.S. was on the brink of reaching a nuclear deal with Iran.

The global benchmark Brent crude stood at $64.6 per barrel, while West Texas Intermediate Crude was trading at $61.7 per barrel. These figures represent a substantial drop compared to earlier in the week, when prices soared after the U.S. and China announced a 90-day tariff truce.

In Doha, Qatar, where Trump was on the third day of his Middle East tour, he announced that the U.S. was 'getting close to having a deal' that could avoid a 'violent step.' Historically, Trump withdrew the U.S. from a significant agreement that limited Iran's uranium enrichment capabilities and slashed its nuclear fuel stockpiles.

A new deal could see the lifting of major sanctions on Iranian energy exports, causing a surplus in the international oil market. Earlier this month, OPEC+ member countries announced plans to boost oil production by 411,000 barrels per day in June, adding to a 549,000 bpd increase in April and May. Furthermore, the US Energy Administration reported an unexpected increase of 3.5 million barrels in US crude inventories last week, providing another reason for the oil price drop.

Trump's comments sent shockwaves through the oil market, causing shares in major oil companies like BP, Shell, and Harbour Energy to drop by 3.9%, 2.1%, and 1.8%, respectively. Despite the U.S. markets performing relatively well, the FTSE 100 and FTSE 250 indices were up only marginally. Asian markets, however, faced much weaker sentiment, with Hong Kong's Hang Seng index, Seoul's KOSPI, and Japan's Nikkei 225 closing 0.8%, 0.7%, and 1% lower, respectively.

Iran-U.S Nuclear Deal Implications

A potential nuclear deal between the U.S. and Iran could significantly impact the international oil market, offering both opportunities and challenges.

Oil Price Dynamics

Supply surge: The removal of sanctions could potentially allow Iran to ramp up its oil exports, creating a supply glut that could lead to lower oil prices.

Economy and Geopolitics

Economic repercussions for Iran: The lifting of sanctions would provide Iran with much-needed economic stimulus, potentially boosting its GDP and leading to increased regional stability.
Regional stability: A nuclear deal could help reduce tensions in the Middle East and lessen volatility in oil production and transportation, benefiting the global economy.

Competition and Energy Security

Production adjustments: Other oil-producing nations, especially OPEC members, might need to adjust their production levels to maintain market share and achieve balance.
Diversification of oil sources: The deal could promote global energy security by reducing reliance on volatile regions and providing a more diversified oil market.

The potential nuclear deal between the U.S. and Iran could instigate a change in the finance sector, particularly in the energy industry, as the lifting of sanctions could lead to an increase in Iranian energy exports, causing a surplus in the international oil market that could influence oil prices. The escalating competition in the oil industry could necessitate production adjustments among OPEC members to maintain market share and ensure energy security by promoting a more diversified oil market.