Oil Price Today (May 4): Crude oil dips below $110, falls for second session. What’s behind the decline?

Oil prices edged on Monday, down for a second consecutive session in a row as markets weighed U.S. President Donald Trump’s plan to “free” vessels stranded due to the ongoing closure of the Strait of Hormuz, even as tensions between Tehran and Washington persist.

In a Truth Social post on Sunday, Trump announced “Project Freedom,” an initiative aimed at assisting cargo ships stuck since the start of the Iran conflict. The operation will primarily focus
on enabling civilian vessels from non-aligned countries to safely exit the waterway and resume operations.

Crude oil price on May 4

Brent crude slipped 0.35% to $107.77 per barrel, while U.S. West Texas Intermediate declined 0.57% to $101.31 per barrel.

Crude oil futures fell sharply on Friday from 4-year highs after Iran signalled a proposal to resume negotiations with the U.S., though prices remained on track for weekly gains as Tehran continued to block the Strait of Hormuz and the U.S. Navy maintained restrictions on Iranian crude exports.

The Strait of Hormuz, a vital route that previously handled nearly one-fifth of global energy flows, remains largely blocked, bringing shipping activity in the region close to a halt.

Highlighting the risks in the area, the United Kingdom Maritime Trade Operations agency reported that a tanker was struck by projectiles north of Fujairah in the United Arab Emirates on Monday.

At the same time, traders are monitoring supply developments after OPEC+ agreed to raise output by 188,000 barrels per day. This marks the group’s first meeting following the departure of the United Arab Emirates.

On the outlook, Haitong Futures, as cited by Reuters, noted that the current ceasefire could be temporary. A lack of progress in U.S.-Iran talks by the end of April may lead to renewed escalation, potentially pushing oil prices higher.

Macquarie expects crude to remain supported in the $85 to $90 range in the near term, gradually moving toward $110 as supply conditions improve. However, it cautioned that prolonged disruptions through April could drive Brent as high as $150 per barrel.

Nuvama Institutional Equities echoed a similar view, stating that an extended shutdown of the Strait of Hormuz, which carries around 20 million barrels per day, could lift crude prices into the $110 to $150 range.

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