Global oil prices fell sharply on Monday, dropping to their lowest level in two weeks as markets reacted to growing optimism that tensions between the United States and Iran could ease, reducing fears of disruption to oil flows through the Strait of Hormuz.
Brent crude declined by $4.71, or 4.55 per cent, to $98.83 per barrel, while West Texas Intermediate (WTI) fell $4.57, or 4.73 per cent, to $92.03 per barrel. Both benchmarks touched their weakest levels since May 7 during the trading session.
The downturn follows weeks of elevated prices driven by heightened tensions in the Middle East, particularly concerns that conflict involving the US, Israel and Iran could disrupt shipping routes and restrict energy supplies through the Strait of Hormuz — a critical passage for global oil and gas trade.
The Strait is one of the world’s most strategic energy chokepoints, handling roughly a fifth of global oil and liquefied natural gas shipments before the recent tensions. Any disruption in the area typically triggers volatility in global energy markets.
Sentiment shifted after reports suggested that discussions between Washington and Tehran had made progress toward a potential understanding aimed at easing tensions and restoring stability to shipping routes. However, officials have also indicated that significant differences remain, and no final agreement has been reached.
Market analysts described the development as a cautious turning point. While some easing of geopolitical risk has improved sentiment, uncertainty remains high, and traders are still weighing the possibility of renewed escalation.
Energy analysts also warned that even if a diplomatic breakthrough is achieved, it could take months for oil flows and infrastructure in affected areas to fully normalise.
For oil-importing countries like Ghana, the drop in crude prices could provide short-term relief by easing fuel import costs, transport pressures and inflationary risks. However, the benefit may be temporary if geopolitical tensions resurface.
Despite the recent decline, market watchers caution that the situation remains fragile. Any breakdown in negotiations or renewed conflict around the Strait of Hormuz could quickly reverse the price drop.
