Brent Crude Posts Worst Month Since 2020, Falls ~20% From 2026 Peak on US–Iran Truce Hopes
Brent crude settled at $92.56 on May 29, down 1.2% on the final session of the month and a six-week low, capping a ~19% monthly slide — its worst since 2020 — and leaving the benchmark roughly 20% below its 2026 peak. The sell-off tracks growing optimism that a tentative 60-day US–Iran ceasefire extension will reopen the Strait of Hormuz, even as strikes continued through Thursday. For Saudi Arabia, the world's top crude exporter, the move cuts both ways: softer prices pressure oil revenue, while a Hormuz reopening would restore seaborne export volumes.
Brent crude posted its worst month since 2020 in May, settling at $92.56 on Friday, May 29 — down 1.2% on the month's final session and a six-week low. The international benchmark fell roughly 19% over the month and now trades about 20% below its 2026 peak, a second consecutive weekly decline that has unwound much of the war-risk premium built up during the Strait of Hormuz crisis.
What drove the move
The sell-off tracks mounting optimism that the United States and Iran have "mostly agreed" on a 60-day memorandum of understanding to extend their ceasefire. Under the draft terms, shipping through the Strait of Hormuz would be "unrestricted," with no tolls paid to Iran; Iranian state television said Tehran agreed to restore commercial vessel traffic to prewar levels. The agreement still awaits President Donald Trump's sign-off — he has signaled he wants several days to review it.
The risk that keeps prices from falling further
The diplomacy is not yet matched by facts on the water. Strikes continued on Thursday, May 28, with Iranian forces firing ballistic missiles toward Kuwait and sending attack drones toward the Strait. UBS noted there is still "little evidence" of any short-term improvement in vessel traffic or energy flows through the region. The gap between a signed framework and reopened shipping lanes is what is keeping a floor under prices even as the headline trend points lower.
Why it matters for Saudi Arabia
As the world's top crude exporter, the Kingdom sits on both sides of this trade. Lower Brent compresses oil revenue and widens the distance to the budget's fiscal break-even oil price, pressuring the fiscal position. At the same time, a credible Hormuz reopening would restore the seaborne export volumes lost during the crisis — partly offsetting weaker per-barrel pricing through higher shipped volumes. The net effect on Saudi oil receipts hinges on whether the truce translates into actual barrels moving through the Strait.
Brent's retreat marks a sharp reversal from April, when the benchmark held near $95 on stalled Hormuz flows and ceasefire uncertainty. The May slide reflects the market pricing in a return toward normalized supply — a move that remains contingent on a deal that, for now, is only tentative.
Brent Crude
$92.56
International benchmark on May 29, down 1.2% on the month's final session and a six-week low.
May Decline
~ -19%
Brent's drop over the month — its steepest monthly fall since 2020 — as ceasefire optimism unwound the war-risk premium.
Off 2026 Peak
~ -20%
Retreat from Brent's 2026 high, reversing the spike driven by the Strait of Hormuz crisis.
Ceasefire MOU
60 days
Length of the tentative US–Iran truce extension, still pending President Trump's sign-off; the draft pledges 'unrestricted' Hormuz traffic with no Iranian tolls.
