Oil Prices Drop 17 Percent on Trump Iran Deal Hopes

Recent reports show progress on a draft US Iran agreement covering ceasefire, free navigation through the Strait of Hormuz, and sanctions relief tied to nuclear limits. This has cut the geopolitical risk premium, the extra cost markets add for uncertainty around supply shocks.
Brent crude fell roughly 17 percent from its May high to near 91 dollars per barrel while WTI traded around 86 dollars. Markets are now pricing one of the largest monthly drops since 2020 in the 17 to 19 percent range. Traders appear to be betting on lower tension and easier Hormuz access even though some physical supply constraints remain.
The VIX index, which measures expected market swings, hit its lowest level since January as overall fear eased. President Trump stated that gasoline prices will fall once Iran stops its actions and he demanded Hormuz stay open with no tolls plus firm limits on Iranian nuclear work.
Some market watchers remain doubtful the deal will hold because Iran has not fully agreed on nuclear terms. For oil importers such as India every 10 dollar drop in crude can cut the yearly import bill by several billion dollars. Overall the price move reflects quick pricing of de escalation hopes rather than any sudden rise in actual supply.