What led to the recent 11 per cent drop in crude prices?

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The 11 per cent drop in crude prices was driven by hopes of peace that could reopen the Strait of Hormuz
Crude prices fell more than 11 per cent over the course of a week as markets priced in expectations that an imminent peace agreement could lead to the reopening of the Strait of Hormuz. That waterway is a key transit route for a significant portion of global oil supply, so the prospect of it reopening supported bearish pricing pressure. The decline happened before weekend reporting that the United States had hardened its negotiating terms with Iran.
Expectations of an imminent peace agreement
The drop occurred during a week when market sentiment was tied to hopes that a peace agreement in the Middle East was close. Those hopes were specifically linked to the possibility that the Strait of Hormuz would reopen.
Reopening of the Strait of Hormuz influenced oil supply expectations
The Strait of Hormuz serves as a major passage for oil flows, with a significant portion of global oil supply transiting through it. When traders expect such a bottleneck to ease, crude prices can move down accordingly.
Weekend reports later pointed to tougher US negotiating terms
After the week-long decline, weekend reports said the United States had hardened its negotiating terms with Iran to end the Middle East war. US President Donald Trump was reported to have sent back a revised version of a possible memorandum of understanding to Tehran with tightened negotiating points, which later coincided with oil prices rising again when markets reopened.

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What led to the recent 11 per cent drop in crude prices?

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