Share to ClassroomOil Falls 20% on US-Iran Peace Deal
Oil prices fell sharply on Friday. Brent crude could drop about 20% in May, its biggest fall since 2020. The drop came after the US and Iran agreed to extend a ceasefire. A ceasefire is a stop in fighting. Brent— the world oil price— fell to about $93a barrel. AAA (the American Automobile Association) said US gasoline now costs $4.39a gallon, down from a peak of $4.56.
The war started on 28 February. The US and Israel attacked Iran. Iran then threatened ships in the Strait of Hormuz. This narrow sea path carries about a fifth of the world's oil. The strait has been mostly closed since. Brent briefly jumped to $120a barrel, from about $70before the war. BBC (a British news service) said the US attacked an Iranian port this week. President Donald Trump will meet his team to make a final decision.
Even so, gasoline is still nearly 50% higher than before the war. Oil bosses warn supplies are very low. ExxonMobil's Neil Chapman said oil could pass $150a barrel within weeks. Chevron's top boss Mike Wirth said it could take weeks and weeks to clear sea mines and move 2,000 trapped ships from the strait. Experts say oil prices may need six to eight weeks to settle after fighting ends.
