WTI and Brent Crude futures fluctuated near $89 and $95 per barrel on May 28 as a proposed 60-day US-Iran ceasefire extension and Hormuz mine-clearance deal competed with fresh Gulf military incidents for market direction. Presidential approval remains pending.

Key Highlights

  • WTI crude settled near $89.772 per barrel, up 1.23%, while Brent traded around $94.746, gaining 0.48%, as investors parsed conflicting signals from the Gulf.
  • Axios reported a proposed 60-day memorandum of understanding between the US and Iran to extend the ceasefire, guarantee unrestricted Hormuz shipping, and begin nuclear negotiations.
  • Iran's Revolutionary Guard warned of a strong response to any further unauthorised entry into the Persian Gulf.
  • The agreement still requires approval from President Donald Trump and has not been finalised.

WTI and Brent crude futures oscillated between gains and losses on May 28, settling near $89.772 and $94.746 per barrel respectively. The session captured the central tension in oil markets: diplomatic momentum toward a ceasefire extension running against active military incidents that keep Supply-risk premiums in place.

A Preliminary Framework, Not a Final Deal

The primary catalyst was an Axios report detailing a proposed 60-day memorandum of understanding between the United States and Iran. The framework would extend the existing ceasefire, open a channel for nuclear programme negotiations, and guarantee unrestricted commercial shipping through the Strait of Hormuz. Iran would also be required to remove all mines from the waterway within 30 days.

The Strait of Hormuz handles roughly 20% of global seaborne crude trade. A durable agreement securing passage would compress the geopolitical risk premium embedded in both benchmarks. However, with the deal unfinished and presidential approval still outstanding, markets declined to price in a sustained peace Dividend.

Military Incidents Limit Gains

The session's early 2% advance illustrated the situation's fragility. US forces confirmed the destruction of attack drones near Hormuz. Kuwait reported intercepting a missile fired toward the country. Iran's Revolutionary Guard warned that ships attempting unauthorised entry into the Persian Gulf would face a firm response.

The pattern is familiar. Since the fragile ceasefire took hold in April 2026, recurring skirmishes have kept both benchmarks range-bound and prevented sustained directional moves in either direction.

Supply Data Supports the Floor

Underlying fundamentals lend support to prices. US crude inventories fell by 2.8 million barrels last week according to the American Petroleum Institute. The Hormuz disruption has simultaneously tightened physical crude availability for global buyers. Chevron (NYSE: CVX) has flagged growing regional supply concerns, noting that logistical recovery would require weeks even after strait traffic normalises.

Conclusion

Presidential approval of the 60-day memorandum and the start of mine-clearance would likely compress the risk premium in both benchmarks. A breakdown in talks or further escalation could push prices sharply higher. Until the framework is formalised, energy markets will remain hostage to developments out of the Gulf.