**Oil Prices Decline Amid Iran War Developments**
On Tuesday, May WTI crude oil prices fell by $1.50 (-1.46%) to close at $101.20, while May RBOB gasoline declined by $0.0559 (-1.71%). The initial spike in oil prices, which had reached a three-week high earlier in the day, was driven by President Trump’s willingness to consider ending U.S. military action against Iran, even with the Strait of Hormuz closed, and Iran’s attack on a Kuwaiti oil tanker off Dubai.
The decline in prices occurred after Iranian President Masoud Pezehkian indicated a willingness to end hostilities, provided Iran’s sovereignty in the Strait of Hormuz is recognized. Currently, the Strait of Hormuz, a significant global oil trade route handling about 20% of the world’s oil, remains largely blocked, causing Persian Gulf oil producers to reduce output by roughly 6% due to capacity constraints. Meanwhile, OPEC+ announced plans to increase output by 206,000 barrels per day, although this may be impacted by ongoing regional tensions.
