Gotrade News - Global oil prices extended losses in early Asian trade on Monday (May 4) after US President Donald Trump pledged to escort neutral vessels through the Strait of Hormuz starting today. Brent slipped below $108 a barrel while WTI traded around $101 a barrel.
The decline came as tensions between Washington and Tehran appeared to ease, with the conflict now in its tenth week. Markets read Trump's pledge as a de-escalation signal regarding the dual blockade in the Persian Gulf.
Key Takeaways
- WTI fell 0.5% to $101.45 per barrel and Brent eased 0.2% to $107.93 per barrel.
- President Trump pledged to escort neutral vessels through the Strait of Hormuz.
- Global energy names like Exxon Mobil (XOM) serve as benchmarks for oil sector exposure.
Brent fell 0.2% to $107.93 a barrel while WTI eased 0.5% to $101.45 in Asian trading. The slide extended a three-day decline from prices that earlier touched their highest since 2022.
Trump announced the escort plan on Truth Social, citing the goal of freeing innocent people, companies and nations caught in the conflict. Iran had blocked vessels from leaving the Persian Gulf while the US intercepted ships heading to or from Iranian ports.
Market Sentiment
ANZ Research noted Iran's peace proposal initially boosted risk appetite at the start of the week. However, Trump's comments rejecting the latest version of the proposal kept sentiment restrained.
Iran is reportedly reviewing Washington's response to its 14-point peace proposal submitted via Pakistani mediation. Talks were described as positive although Trump did not provide further details on progress.
Equity markets are weighing the impact of softer energy prices on integrated majors such as Chevron (CVX) and downstream operators. Retail investors can gain commodity-style exposure via United States Oil Fund (USO) if they want to track crude.
Geopolitical risk continues to hang over the market despite the moderate price decline. Investors remain cautious as US-Iran diplomatic developments unfold throughout the week.
Energy price moves also feed back into Indonesian equities and other emerging markets where commodity sectors are heavyweights. Diversified exposure via SPDR Energy Select ETF (XLE) offers a benchmark for US energy sector performance.
Sources
Bloomberg Technoz, Oil Falls After Trump Pledges to Guide Vessels Out of Hormuz, 2026.
IDX Channel, Oil Slips, Middle East Sentiment Still Lingers, 2026.
