Brent crude loses ground amid looming US-Iran peace deal

Brent prices are on track for their worst monthly performance since 2020. The downside is driven by growing expectations that the United States and Iran are on the verge of a long-awaited peace agreement. According to Reuters sources, the two conflicting sides are currently discussing the 60-day extension of the ceasefire, contingent on lifting the blockade of the Strait of Hormuz.

However, the transit recovery through this key energy route will take time. The process of demining the waterway alone could take about a month, not to mention restarting mothballed oil fields and repairing damaged infrastructure.

The United States has a particularly strong interest in seeing the Strait reopened. The country’s crude reserves have been declining for six consecutive weeks. The situation with distillates is even worse, as the inventories have recently fallen to the lowest level in more than two decades. Dallas Fed President Lorie Logan warned that massive output from the Permian Basin will not be enough to cover the global oil deficit if the strait’s issue remains unresolved in the near term. This raises the possibility that Washington could drag its feet or derail the negotiations, though such a scenario also creates strong support for Brent crude near $87 per barrel.

The market is confused: any hints at progress in the peace talks trigger a sharp drop in oil prices, while signs of escalation lead only to short-lived rebounds. CTA funds have already reduced their long positions in WTI crude from 82% to 55%, signaling that sellers are seizing the initiative.

The technical picture looks bleak. Brent oil continues to set new lows after peaking at $114.91. The Chaikin Oscillator remains in negative territory. Over the past few sessions, the Market Facilitation Index has shown the dominance of green and blue bars. This means that market participants are actively pushing quotes lower while increasing selling volumes.

Take a look at the trading strategy down below:

Sell Brent crude at the current price near $95.00. Place Take profit at $88.00, and set Stop loss at $100.00.

The forecast remains relevant between May 29 and June 5, 2026.