WTI drops to $88.68, Brent below $95 on hopes of easing US-Iran tensions

Crude oil prices plunged in volatile Asian trading early Thursday (May 28, 2026) as investors bet that a possible easing of tensions between the United States and Iran could eventually restore more normal shipping through the Strait of Hormuz, the world’s most critical oil chokepoint.

As of 7:09 am Tokyo time on May 28, benchmark US West Texas Intermediate (WTI) crude traded at $88.68 per barrel, down $5.21 or 5.55%, while Brent fell $5.29 or 5.31% to $94.29 a barrel, according to Oilprice.com data.

Murban crude from the UAE dropped 5.39% to $89.93. Natural gas futures bucked the broader energy selloff, rising 2.82% to $3.095.

Gasoline futures declined 2.7%, heating oil fell 3.15%, and the OPEC basket price slid 4.46% to $107.37 per barrel amid broad expectations that oil flows through the Gulf could gradually stabilise if negotiations between Washington and Tehran continue.

The sharp overnight decline followed reports from Iranian state media describing a draft framework under discussion that could reopen commercial traffic through the Strait of Hormuz within weeks.

President Donald Trump later said the United States would “watch over” the strait but signaled Washington was in no hurry to finalize a deal with Tehran.

Markets have remained highly sensitive to any developments involving Hormuz, the narrow maritime corridor linking the Persian Gulf to global markets.

Roughly one-fifth of the world’s oil supply normally passes through the strait.

Since the outbreak of the 2026 Iran conflict, shipping disruptions and military tensions in the region have fueled some of the most volatile energy trading since the 1970s oil shocks.

Despite the steep drop in crude prices, analysts cautioned that energy markets remain fragile because actual vessel traffic through Hormuz remains far below normal levels.

Data cited by shipping analysts showed only limited commercial crossings in recent days, underscoring continuing risks to global supply chains even as traders price in hopes for diplomacy.

The International Energy Agency has warned that restoring regular flows through Hormuz remains “the single most important variable” affecting global energy prices and inflation pressures.

The agency said disruptions earlier this year slashed crude and fuel shipments through the strait from more than 20 million barrels per day before the crisis to just a fraction of that volume during the peak of the conflict.

The latest selloff also reflected profit-taking after weeks of elevated prices driven by fears of prolonged supply disruptions.

Brent crude had surged above $100 a barrel earlier this month amid military escalation involving Iran, Israel and the United States.

Energy analysts said traders are now balancing optimism over possible diplomatic progress against longer-term concerns about depleted inventories, damaged infrastructure and geopolitical uncertainty across the Middle East.

The US Energy Information Administration recently projected Brent crude could average around $106 per barrel during the second quarter of 2026 before gradually easing later in the year if Middle East production recovers and shipping conditions improve.

For major Asian importers including Japan, South Korea, China and India, the market turmoil remains especially significant because much of their crude oil imports transit through Hormuz.

Japanese refiners earlier urged Tokyo to prepare emergency stockpile releases amid fears of prolonged disruptions.