#TradFi交易分享挑战 #原油走低 The U.S.-Iran Negotiation Expectations Rise, Triggering a Sharp Drop in Oil Prices, with a Clear Tightening Fundamental Pattern

1. Market Analysis: Expectations of U.S.-Iran Talks Drive Oil Prices Down sharply.
Over the weekend, media reports suggested that the U.S. and Iran were "close to reaching an agreement" and discussed opening the Strait of Hormuz, among other news. However, Trump later stated that there are still disagreements with Iran on some thorny issues, and on Sunday, he again said there is no rush to reach any agreement with Iran.
Nevertheless, at Monday's open, international oil prices still gapped lower, with WTI falling to a low of $90 per barrel, Brent dropping to $94 per barrel, and the main SC contract touching the 600 yuan per barrel level, closing with a decline of 6.5%. This sharp decline was mainly driven by market optimism about the negotiations. In fact, as of May 25, neither side had signed a final memorandum of understanding. Since May, oil prices have become increasingly sensitive to news about U.S.-Iran negotiations. On May 6, reports indicated that a memorandum was close, with Brent briefly falling below $100 per barrel and WTI below $90, with a single-day drop exceeding 10%. Subsequently, Iran officially rejected the U.S. proposal, negotiations stalled, and oil prices rebounded accordingly.

2. Key Timeline of U.S.-Iran Negotiations (Early April—May 25)
Reviewing the crude oil market since the outbreak of conflict between the U.S., Israel, and Iran in late February, there have been four key moments when halts in negotiations or ceasefire news directly triggered sharp drops in oil prices: April 7, April 17, May 6, and May 25, with each decline deepening sequentially. The common trigger for these four major drops was market expectations of progress in U.S.-Iran negotiations and improved strait navigation, leading to a reversal of geopolitical risk premiums. Currently, the conflict has lasted nearly three months, with both sides increasingly willing to resolve through negotiations. Oil prices have risen to the upper end of previous oscillation ranges, with Brent and WTI respectively above $110 and $105 per barrel. This, combined with heightened market sensitivity to negotiation progress and other negative news, has significantly increased the market's reaction.

3. Crude Oil Fundamentals
1. Supply-side Collapse, Transmission to Downstream, Support at the Bottom of Prices
The core contradiction in the current crude oil market is that the collapse in supply has not been offset by demand weakness; the supply-demand gap is rapidly depleting global inventories at record speed.
On the supply side, the impact of the Strait of Hormuz blockade is historic—OPEC data shows that April OPEC production decreased by nearly 10 million barrels per day compared to February, and IEA confirms a total global oil supply loss of about 13 million barrels per day. Gulf countries' output has fallen about 14 million barrels per day below pre-conflict levels. Meanwhile, Russia, affected by drone attacks, saw a 300k barrel per day decrease in April, with potential further losses of 500k barrels per day in the second half if attacks persist, indicating limited global supply elasticity.
On the demand side, although high oil prices have caused marginal weakening, the extent is far less than the supply losses—IEA estimates that in Q2, global oil demand will decline by about 2.4 million barrels per day year-over-year, while refinery throughput decreases by about 5 million barrels per day, far exceeding the demand reduction. The tightness in refined products in multiple countries surpasses that of crude oil; US gasoline inventories are below five-year seasonal lows, and crack spreads remain extremely high, directly reflecting this structural shortage. The speed of global crude oil drawdowns has accelerated, with IEA data showing a total reduction of 246 million barrels in global observable inventories from March to April. OECD land inventories fell by 146 million barrels in April alone, setting a record for consumption speed. EIA has significantly raised its 2026 global inventory change forecast from a previous draw of 300k barrels per day to a large draw of 2.6 million barrels per day, with a record-high second-quarter draw of 8.5 million barrels per day, the most aggressive inventory reduction expectation ever.
2. Changes in Logistics Volume: Slow Recovery of Strait Navigation, Far from Normal
Since the closure of the Strait of Hormuz, its navigation status has been a core focus of oil market trading. Pre-conflict, the strait saw an average of about 120 ships per day, with 60 ships each departing and entering. In terms of vessel types, about 10 tankers per day were involved in inbound and outbound traffic, corresponding to approximately 16.5 million barrels per day of heavy oil flow. After the conflict erupted on February 28, shipping volume plummeted. Clarkson Research data shows that in mid-April, traffic temporarily rebounded, but since May, no further increase signals have appeared. Currently, navigation remains severely restricted, with only scattered oil tankers departing. According to ShipView, as of the morning of May 25, the total number of ships in the Persian Gulf was 2,602, accounting for 1.39% of global tonnage; among these, 101 were oil tankers (3.07% of global). Once navigation is truly restored, a concentrated release of shipping volume is expected. Referencing the most extreme pre-conflict day, February 28, when only 10 tankers left the Gulf, subsequent daily departures are unlikely to exceed this level, and it would take about 10 days to clear the backlog of ships in the Gulf. Additionally, the reopening may not be fully open but subject to Iranian navigation restrictions, meaning initial actual throughput could be even lower than these estimates.
Overall, logistics recovery will be "gradual" rather than "switch-like," making it difficult to generate large-scale incremental supply in the short term. In summary, the optimism from U.S.-Iran negotiation news has pressured oil prices, but the fundamental logic of "supply collapse, demand slowdown, and inventory depletion" remains clear. This gap is unlikely to be bridged in the short term, limiting further downside in oil prices.

4. Scenario-Based Oil Price Trend Analysis
Besides fundamentals, the key short-term factors influencing oil prices are the trajectory of U.S.-Iran relations and the recovery of Strait of Hormuz navigation. Given the conflicting core demands of both sides, negotiations remain highly uncertain. Future oil price trends should consider multiple scenarios.
Scenario 1: U.S.-Iran reach a 60-day memorandum of understanding, with phased reopening of the strait
Assuming a 60-day understanding is reached within weeks, with phased reopening of the strait. Even if negotiations break through, the resumption of oilfield production, tanker deployment, and insurance recovery will take weeks or months. The actual supply in the Middle East will be slow to return to pre-conflict levels, compounded by ongoing disruptions to Russian supply, resulting in limited global supply increases. Moreover, the sharp drop in oil prices on May 25 has already partially priced in optimistic expectations, and further sharp declines are unlikely.
Scenario 2: Stalemate persists, slow recovery of Strait navigation
If within the next 1-2 months, no agreement is reached between the U.S. and Iran, and Strait navigation only recovers slowly, the supply gap will remain high. Coupled with peak summer demand and extremely low inventories, downside support for prices will be strong.
Scenario 3: Escalation of conflict, breakdown of negotiations leading to continued blockade
If negotiations break down, military actions resume, and the Strait remains blocked, the supply gap will persist. Brent could break through the previous high of $120 per barrel.