Oil tumbles more than $5 on US-Iran deal optimism and easing supply fears
Published May 21, 2026
- Markets rally as oil falls on Iran peace hopes.
- Oil slump boosts stocks as US-Iran talks progress.
- Global markets climb as oil eases on ceasefire hopes.
Oil prices fell sharply on Wednesday as hopes grew for a possible US-Iran deal to end the war in the Middle East, easing concerns over supply disruptions in key global shipping routes.
US crude dropped $5.89 to $98.26 a barrel, while Brent fell $6.26 to $105.02, as markets reacted to signs of progress in negotiations between Washington and Tehran.
US President Donald Trump said talks with Iran were in their final stages, while warning of further strikes if no agreement is reached. He also said the United States was prepared to wait a few days for the “right answer” from Tehran.
The decline in oil helped ease broader inflation fears, pushing US Treasury yields lower as investors moved into government bonds. The benchmark 10-year yield fell 9.4 basis points to 4.576%.
The US dollar also slipped from a six-week high.
There were tentative signs of easing pressure in the Gulf, with shipping data showing two Chinese oil tankers exiting the Strait of Hormuz.
Wall Street advanced as lower oil prices and falling yields lifted sentiment ahead of major technology earnings.
Nvidia is due to report results after the market close, with expectations of a sharp rise in revenue driven by continued demand for artificial intelligence chips.
Chip stocks gained ahead of the results, helping push semiconductor shares higher.
Global equities also moved higher, with European markets and a broad global index posting gains as risk appetite improved.
In bond markets, European and Japanese long-dated yields also eased after recent highs, mirroring the US move.
Germany’s 10-year yield fell slightly from a 15-year high.
In currency markets, the US dollar index slipped, while the euro strengthened and the yen also gained ground against the dollar.
Gold rose more than 1%, supported by weaker yields and softer dollar demand.
