US oil prices fall below $90 per barrel for first time since May 7

West Texas Intermediate crude oil closed at roughly $90.31 per barrel on May 25, slipping below the $90 mark for the first time since May 7. The drop, more than 6% from the prior day’s close, represents the sharpest single-session decline in weeks.

What drove oil off a cliff

The culprit is diplomacy. Tensions between the US and Iran, particularly around the Strait of Hormuz, the narrow chokepoint through which roughly a fifth of the world’s oil supply passes, have been cooling. Signals of potential ceasefires and diplomatic progress have pulled the rug out from under the geopolitical risk premium that had been propping up crude prices for months.

WTI surged to near $119 per barrel in March 2026, driven by Strait of Hormuz disruptions. From $119 to $90 is a decline of roughly 24%.

The Energy Information Administration (EIA) forecasts Brent averaging $89 per barrel in Q4 2026 and dropping further to $79 in 2027, driven by rising Middle East production.

On May 7, the last time WTI dipped below $90, prices ranged between $85 and $92 before bouncing back.

The oil-crypto connection

Throughout 2026, crypto analysts have observed that drops in the oil price below key psychological thresholds have frequently served as encouraging signals for digital asset investment. When WTI was screaming toward $119 in March, Bitcoin and other risk assets were under pressure from the same inflation anxiety that was pumping crude higher.

What this means for investors

The EIA’s forecast of Brent crude dropping to $79 per barrel in 2027, driven by rising Middle East production, suggests this could be more than a temporary reprieve.

Traders should also watch for secondary effects. Lower oil prices reduce revenue for energy-exporting nations, some of which have been active participants in sovereign wealth fund allocations to digital assets. A sustained decline in crude could paradoxically reduce one source of institutional demand for crypto, even as it improves the macro environment.

The macro indicators to monitor from here are straightforward: upcoming CPI prints to see if falling energy costs translate into softer inflation data, Fed commentary on whether the oil decline changes their policy calculus, and of course, whether WTI holds below $90 or bounces back as it did in early May.

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