New Delhi, May 25 (IANS) Global crude oil prices tumbled to their lowest levels in two weeks on Monday amid optimism over a possible breakthrough in negotiations between the US and Iran, easing fears of prolonged supply disruptions in West Asia.

International oil benchmark Brent crude fell 6 per cent to trade below the $100-per-barrel mark. Similarly, US West Texas Intermediate (WTI) crude declined more than 6 per cent to $90.33 during early trade. Both benchmarks touched their weakest levels since early May.

Brent crude had jumped to a peak of $115 per barrel earlier this month as markets priced in supply risks and tightening global inventories. From May 4 to May 25, the benchmark declined by nearly 15 per cent.

The decline in oil prices came after US President Donald Trump indicated that Washington and Tehran had made significant progress towards a possible peace understanding aimed at easing tensions in the region and reopening the Strait of Hormuz.

Oil prices had surged sharply in recent months after tensions escalated between the US, Israel and Iran.

In addition, Trump said Washington and Iran had “largely negotiated” an understanding on a peace deal that could lead to the reopening of the Strait of Hormuz.

However, uncertainty around the negotiations continues to persist. Trump said several critical issues still remain unresolved and indicated that the US was not rushing to finalise an agreement.

Analysts noted that crude prices have slipped below the $100-per-barrel mark on expectations of a possible US-Iran deal, which, if sustained, could emerge as a turning point for global markets.

Additionally, leading global brokerages warned that the oil market remains vulnerable if disruptions in the Strait of Hormuz continue for an extended period.

The Strait of Hormuz — one of the world’s most strategically important energy routes — previously carried around one-fifth of global oil and liquefied natural gas shipments before the conflict disrupted supplies earlier this year.

–IANS

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