Brent Fell 7% Below $100 on Iran Deal as Rystad Says Supply Needs 6 More Weeks

Key Takeaways

• Brent crude fell below $100 for the first time in weeks after reports of a possible US-Iran agreement tied to reopening the Strait of Hormuz
• Rystad Energy said physical oil flows may still take six to eight weeks to recover, even if a deal is signed immediately
• WTI crude oil dropped near $92 as traders removed part of the geopolitical premium that had pushed global energy markets higher

For weeks, oil prices were being driven less by supply data and more by fear. Traders were pricing in the possibility that the Strait of Hormuz could stay disrupted well into the summer. This changed over the weekend after President Donald Trump said negotiations with Iran were “largely negotiated.” It triggered a sharp selloff in crude. The oil price today took a whole different turn. Brent crude oil price futures dropped more than 7%, briefly slipping below $100. Meanwhile, WTI crude oil fell toward $92 a barrel. But underneath the market reaction, the actual supply picture still looks tight.

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Why a Signed Iran Deal Takes 6 to 8 Weeks Before Oil Supply Physically Recovers

Analysts say futures markets are reacting much faster than the physical oil market can. According to Rystad Energy, even under an optimistic scenario where access through Hormuz improves quickly, it would still take six to eight weeks before meaningful oil volumes normalize. Processing delays at ports could extend that timeline further.

About a fifth of global oil and LNG shipments normally pass through the Strait of Hormuz. This makes it one of the most important chokepoints in energy markets. During the conflict, millions of barrels of supply were disrupted, pushing oil prices above $100 and forcing Asian importers to scramble for alternatives.

Reports point out how Brent crude is currently at a low of $85.19 after recording a drop of over 7% in the past couple of days.

Paola Rodriguez-Masiu, chief oil analyst at Rystad Energy, said the market may be underestimating how long physical normalization takes. She added,

“The six-to-eight-week lag between credible access conditions and real flow normalization is not a conservative estimate, it is a structural feature of how shipping markets work.”

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Markets Are Already Reacting to Cheaper Energy

The drop in oil immediately lifted risk appetite across global markets. Japan’s Nikkei 225 surged past 65,000 for the first time. Meanwhile, US futures moved higher before Wall Street reopened after Memorial Day. Airlines, transport companies, and rate-sensitive stocks all rallied on expectations that lower fuel costs could ease inflation pressure.

Even so, analysts at UBS and ING warned that the oil supply crisis is not fully resolved. Shipping insurers, tanker operators, and refiners still need confidence that routes through Hormuz will remain open before flows return to normal levels.

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