Global oil prices declined sharply this week after US President Donald Trump signaled that a potential peace agreement with Iran may be nearing and confirmed that previously planned military strikes had been suspended.
Following the development, Brent crude fell below $90 per barrel while West Texas Intermediate (WTI) dropped close to $79, later stabilizing around $84 per barrel at the time of reporting.
Markets also responded to growing expectations that tensions in the strategically vital Strait of Hormuz could ease if diplomatic progress continues, improving the global energy supply outlook.
While the fall in crude prices has offered some relief to global consumers, the impact in Pakistan remains limited.
In a related statement, Prime Minister Shehbaz Sharif said Pakistan was “closer to a peace deal than ever before,” adding that finalisation could come within 24 hours, followed by electronic signing and technical-level talks in the following week. He thanked the United States, Iran, and regional partners for their role in supporting the negotiations, expressing hope that the agreement would lay the foundation for lasting regional stability.
Despite easing oil prices, energy costs continue to be a key driver of inflation worldwide. In the United States, consumer prices rose 4.2% year-on-year in May, the fastest increase in three years, with energy-related expenses contributing significantly to higher costs across transport and utilities.
Industry data from GasBuddy suggests that lower crude prices and improved refinery output have helped reduce gasoline prices in recent weeks. However, fuel markets remain highly sensitive to geopolitical developments.
Analysts warn that despite the recent decline, any renewed escalation around the Strait of Hormuz could quickly reverse the trend and push global oil prices higher again.
