Oil Prices Slide as Iran Signals Nuclear Deal Openness and US Crude Inventories Surge

Oil Market Update – May 16, 2025

Global crude oil prices extended their losses in Thursday’s Asian trading session as fresh geopolitical developments and unexpected inventory data rattled investor confidence. Brent and WTI crude benchmarks dropped sharply following reports of Iran’s potential willingness to re-enter a nuclear agreement with the United States and concerns over rising U.S. oil stockpiles.

Brent and WTI Retreat After Reaching Two-Week Highs

As of 01:13 GMT, Brent crude futures (June delivery) were down 1.6% to $65.04 per barrel, while West Texas Intermediate (WTI) crude fell 1.7% to $61.62. This marks a second straight session of declines after a four-day rally driven by optimism over US-China tariff reductions.

Iran Open to Nuclear Deal If Sanctions Are Lifted

According to NBC News, senior Iranian adviser Ali Shamkhani stated that Tehran is ready to finalize a nuclear agreement with the U.S., provided all economic sanctions are removed. This is the clearest signal yet that Iran’s leadership may be willing to engage diplomatically if conditions are favorable.

The statement comes amid ongoing U.S.-Iran nuclear negotiations, which American officials have described as constructive in recent weeks. However, market participants remain cautious due to the Trump administration’s continued “maximum pressure” campaign, including new sanctions on Iranian crude shipments to China.

If a deal is reached, it could lead to an influx of Iranian oil exports, exacerbating concerns about global oil oversupply.

EIA Reports Surprise Crude Stockpile Build

Further pressuring oil prices, the U.S. Energy Information Administration (EIA) reported a surprise increase of 3.5 million barrels in domestic crude inventories for the week ending May 9. Analysts had expected a drawdown of 2 million barrels, making the inventory build a bearish shock to the market.

U.S. crude stocks now sit at 441.8 million barrels, with traders interpreting the data as a sign of softening demand or short-term oversupply.

This data comes amid OPEC+ supply hikes, adding further weight to oversupply concerns.

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📌 Key Takeaways for Oil Traders

• Iran is signaling readiness for a nuclear deal if sanctions are lifted, potentially unlocking more oil supply.
• U.S. crude inventories surged unexpectedly, reversing bullish sentiment.
• WTI and Brent crude prices are now under pressure despite prior gains from US-China tariff relief.
• A confirmed US-Iran agreement could significantly alter global oil supply dynamics in 2025.

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