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Oil Prices Plunge 4% as U.S.-Iran Nuclear Deal Progress Raises Supply Concerns

President Trump signals a potential agreement with Iran, while U.S. crude inventories rise unexpectedly, adding to market volatility.

An oil pumpjack is pictured in the Permian basin, Loco Hills regions, New Mexico, U.S., April 6, 2023. REUTERS/Liz Hampton/File Photo
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Trader Edward Curran works on the floor of the New York Stock Exchange, Wednesday, May 14, 2025.
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Overview

  • Oil prices dropped nearly 4% following President Trump's announcement of progress in U.S.-Iran nuclear negotiations, which could lead to lifted sanctions and increased Iranian oil exports.
  • Iran's Ali Shamkhani indicated Tehran's willingness to abandon uranium enrichment if U.S. sanctions are removed, further boosting expectations of a deal.
  • The U.S. Energy Information Administration confirmed a 4 million-barrel increase in crude inventories for the week ending May 9, surprising markets and contributing to downward price pressure.
  • Gasoline and distillate inventories fell by 1 million and 3.2 million barrels, respectively, ahead of the summer driving season, reflecting tighter refined product supplies.
  • OPEC+ continues to increase oil production, while revising down non-OPEC supply growth forecasts, adding complexity to global supply-demand dynamics.