Oil Eases on Rising Middle East Optimism

2026-05-03 23:24 By Jam Kaimo Samonte 1 min. read

WTI crude fell to around $101 per barrel on Monday, sliding for the third straight session after US President Donald Trump said Washington would move to “free” stranded cargo ships stuck in the Strait of Hormuz and pointed to progress in negotiations with Iran.

The initiative, dubbed “Project Freedom,” is aimed at assisting civilian vessels that are flagged in countries not affiliated with the conflict in exiting the contested waterway so they can resume their business, with implementation set to begin Monday.

At the same time, Iran indicated it is reviewing Washington’s response to its latest 14-point proposal, raising hopes for a diplomatic resolution to the conflict.

Oil prices have surged sharply this year as the Middle East conflict and the effective closure of the Strait of Hormuz disrupted global markets.

Elsewhere, OPEC+ agreed to a symbolic increase in June production quotas, signaling a business-as-usual stance following the United Arab Emirates’ departure.



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Crude oil prices were near $77 per barrel on Friday and were heading toward a weekly decline of roughly 8% after Israel and Hezbollah reached a ceasefire agreement set to begin on Friday. The truce, if maintained, could remove a major obstacle to broader peace efforts between the US and Iran. Meanwhile, Tehran said vessels passing through the Strait of Hormuz would require mandatory insurance policies, which are currently free but could incur charges later, reinforcing its claims over the strategic waterway. Market data suggested shipping activity slowed after an earlier surge in tanker movements, with no outbound vessels seen leaving the Persian Gulf on Friday morning. In contrast, nearly 10 million barrels of crude were observed transiting or positioned near the strait on Thursday, including the first Saudi-owned tankers to move since the conflict began more than three months ago. Uncertainty continues after planned US-Iran talks in Switzerland were canceled.
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Crude oil steadied near $77 per barrel on Friday as trading remained volatile amid shifting flows through the Strait of Hormuz and renewed uncertainty over US-Iran negotiations on a longer-term peace agreement. Market data suggested shipping activity slowed after an earlier surge in tanker movements, with no outbound vessels seen leaving the Persian Gulf on Friday morning. In contrast, nearly 10 million barrels of crude were observed transiting or positioned near the strait on Thursday, including the first Saudi-owned tankers to move since the conflict began more than three months ago. However, optimism from an interim US-Iran accord was tempered after planned talks in Switzerland were delayed, raising doubts over the durability of any supply recovery. Despite recent stabilization, crude was on track for a weekly decline of around 10%, erasing most of the gains accumulated during the height of the conflict.
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Crude oil rose above $77 per barrel on Friday after planned talks between the US and Iran in Switzerland was cancelled as confirmed by the Swiss Foreign Ministry. Israel also continued to carry out strikes on Hezbollah targets in Lebanon. Still, oil prices were on track for a sharp weekly decline as investors welcomed improving shipping conditions in the Strait of Hormuz after the US-Iran interim peace took effect. The US Central Command announced it had lifted restrictions on traffic to and from Iranian ports and coastal waters, while the Joint Maritime Information Center advised vessels transiting the strait to follow a route closer to Oman’s coastline to reduce the risk from mines. Tankers carrying previously stranded crude began exiting the waterway on Thursday, and Kuwait said it would begin increasing production. As a result, oil prices have erased nearly all the gains recorded since the Middle East conflict began in late February.
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