On May 28, geopolitical negotiations between the United States and Iran hit a major setback. Iranian media reported that the two sides had reached a draft memorandum of understanding, but the White House publicly denied the report, calling it “completely fabricated.” U.S. President Donald Trump also expressed dissatisfaction with the progress of the negotiations.

The news triggered a decline in market risk aversion, putting pressure on international oil prices. WTI crude oil fell more than 4% to $92.03 per barrel, while Brent crude oil dropped nearly 5% to $94.94 per barrel. The reversal in sentiment reflects the market’s sensitivity to developments in the Middle East, a critical global oil supply region.

The Strait of Hormuz, which carries approximately 30% of global crude oil shipments, remains a key geopolitical flashpoint. While initial reports of a potential agreement had eased supply concerns, the White House’s denial reignited uncertainty about the timeline for de-escalation.

Market analysts noted that the uncertainty surrounding US-Iran negotiations will keep oil prices volatile in the near term. Any progress or setback in the talks will likely trigger sharp price swings, as investors adjust their expectations about potential supply disruptions.

In the longer term, the trajectory of oil prices will depend on three key factors: the outcome of US-Iran negotiations, global oil demand growth, and OPEC+ production policy. Until there is clarity on the diplomatic front, oil prices are expected to remain sensitive to geopolitical headlines, with heightened volatility likely to persist.