By Alexander Miller, consultant in energy markets. Eurasia Business News, May 25, 2026. Article n°3006

Oil prices are sliding as markets are reacting to signs of progress on a U.S.-Iran deal that could reopen the Strait of Hormuz, even though shipping through the area remains cautious and the recovery will take time.

Reports say Brent crude fell as much as 5.3% to about $98.08 a barrel, while West Texas Intermediate dropped below $92. The immediate driver is optimism that a breakthrough could reduce the risk premium tied to Hormuz disruptions.

Even with better headlines, shippers are still wary, and congestion plus lingering security concerns mean flows may not normalize quickly. The Strait of Hormuz is a critical chokepoint for global energy trade, so any sign of reopening can move oil prices sharply.

The price drop reflects hope, not full resolution: traders are pricing in lower disruption risk, but the physical restoration of shipping and inventories will likely lag behind the diplomacy.

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Europe risks a major gas storage shortfall if disruptions through the Strait of Hormuz continue for another 1–3 months, with inventories still far below normal seasonal levels.

European officials warn that oil and gas prices will remain well above pre-crisis levels until at least the end of 2027

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Europe entered the current summer refill season with severely depleted gas reserves, with gas stores only 28% full following a prolonged winter. Europe’s storage levels are currently at 35-37%, significantly below the 50% seasonal norm, increasing the risk that the continent will miss its usual 90% target at the beginning of the next winter heating season. 

Three tankers with liquefied natural gas have passed through the Strait of Hormuz in recent days, Bloomberg reports, citing ship tracking data.

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© Copyright 2026 – Eurasia Business News. Article no. 3006