Crude oil prices recorded their steepest one-month decline in six years in May 2024, with the global Brent benchmark falling more than 20%—its largest monthly drop since 2020. U.S. crude oil prices declined 19% over the same period, marking the biggest monthly fall since late 2021.

The drop coincided with market speculation over a potential U.S.-Iran peace deal and uncertainty about the future of the Strait of Hormuz, a critical oil transit corridor. President Donald Trump wrote on Truth Social, "I am about to make a final determination" about a deal with Iran. Oil prices fell further in response to the post. Trump also claimed in multiple public appearances and social media posts during May that Iran "wants to make a deal" and that progress had been made toward an agreement. Two U.S. officials said Trump was reviewing the latest version of a potential agreement but had not yet approved it.

Vessel traffic through the Strait of Hormuz has been nearly nonexistent since the onset of conflict in February, despite the waterway having previously handled more than 20% of the world’s energy supply. Iran has proposed that shippers pay a toll for safe passage, a condition the U.S. considers a deal-breaker. Mike Wirth, CEO of Chevron, said, "We would not consider paying a toll or fee to Iran or any other authority to get our ships out of the strait." Wirth added that recent attacks on ships indicate risks in the strait remain "very real," and that clearing mines and removing an estimated 2,000 stranded vessels would take months. "It’s going to take months ... to make sure that the mines have been cleared, to get 2,000 ships out," he said. "They don’t all go out at once; you need weeks and weeks."

Neil Chapman, senior vice president at ExxonMobil, warned that global inventories of crude oil and refined products like gasoline, diesel, and jet fuel have been drawn down to compensate for the disruption. "Commercial inventories of crude oil, of liquids-linked petroleum, gasoline, diesel, jet fuel, they’ve all run down," Chapman said at Bernstein’s Strategic Decisions Conference in New York City. He added, "We’re approaching unheard-of inventory levels."

Meanwhile, U.S. gasoline prices averaged $4.39 per gallon as of Friday morning, down 17 cents from the year’s peak of $4.56, according to AAA data.