Oil Price Hits Lowest Point in Months Amid Hormuz Shipping Renewal Optimism

Global Commodity Markets Trade on Mixed Note Amid Geopolitical Uncertainty

Commodity markets experienced a mixed trading session on May 25 as investors closely monitored geopolitical developments, currency fluctuations, and shifting global demand expectations. Market sentiment remained cautious due to uncertainty surrounding the Iran conflict and the possible reopening of the Strait of Hormuz, a key global oil transit route.

Oil prices hit two-week lows on Monday on optimism that the U.S. and Iran were moving closer towards a peace deal, despite remaining at odds over key issues, including blockades on the Strait of Hormuz that continued to restrict oil supply from the Middle East. Brent crude futures fell $4.71, or 4.55%, to $98.83 a barrel, while U.S. West Texas Intermediate was at $92.03 a barrel, down $4.57, or 4.73%.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

Both contracts touched their lowest since May 7 earlier in the session. In contrast, precious metals witnessed strong buying interest. Gold prices climbed more than 1%, supported by a weaker U.S. dollar and falling oil prices, as investors assessed the possibility of progress in U.S.-Iran peace negotiations. Spot gold rose 1.4% to $4,570.88 per ounce, while U.S. gold futures for June delivery gained 1.1% to $4,572.90.

Other precious metals also moved higher, with platinum and palladium extending gains as well, reflecting continued safe-haven demand and improving investor sentiment in the metals market. Meanwhile, the U.S. dollar weakened during early Asian trading after optimism surrounding a potential reopening of the Strait of Hormuz pushed oil prices below the $100-per-barrel mark. However, cautious commentary from the Trump administration regarding the prospects of a near-term agreement with Iran kept traders alert to further volatility in commodity and currency markets.