As May’s final day of oil trading is underway, the price of crude is set for its biggest one-month decline in six years, delivering some relief to consumers at the pump and some optimism to investors hoping for an end to sky-high energy prices.

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As measured by the global Brent oil benchmark, prices are on track for a more than 20% decline in May, the biggest monthly drop since 2020.

U.S. crude oil has also recorded a steep 19% drop in May, which would be its largest monthly decline since late 2021.

Relief for consumers

These moves are already showing up in the form of lower gas prices across the United States. As of Friday morning, the average price of unleaded gas had fallen 17 cents per gallon from this year’s peak of $4.56, according to AAA data.

But at $4.39 per gallon, Americans are still paying an average price that has soared 47% since the war began.

High gas prices sent U.S. drivers in search of discount fuel at big-box membership chains like Costco.

The retailer said Thursday that it saw “record-breaking volumes” for gasoline sales last quarter, with the five weeks leading up to May 10 registering as Costco’s “top five volume weeks ever” for gasoline sales. CEO Ron Vachris said many Costco members had used the company’s gas stations “for the very first time.”

A hard sell from the White House

The sharp drop in global oil prices as prompted mainly by messaging from Washington, where President Donald Trump and top administration officials have relentlessly suggested that Iran and the U.S. are in the final stages of talks to end the fighting and return energy shipping to a pre-war status quo.

In May alone, Trump claimed in at least six social media posts that progress had been made towards a peace deal. In public events, he frequently stresses that Iran “wants to make a deal,” and paints himself as the holdout.

In the three months since the U.S. and Israel launched attacks on Iran, Trump has said more than 20 times, online and in person, that either the war had been won, that Iran had been defeated or that a final deal was near, according to an NBC News analysis of his comments.

On Thursday, two U.S. officials told NBC News that Trump was reviewing the latest version of a potential agreement with Iran but had not yet signed off on it.

Again on Friday, Trump invoked the possibility of a deal, writing on Truth Social that he was about to make a “final determination” about it. Oil prices fell further in response to his post.

But even as a deal remains elusive, Trump’s comments left investors grasping at any shred of optimism.

U.S. stocks are surging this year, driven primarily by euphoria in the shares of AI tech giants and corporate earnings, but also due to the administration’s signals that they view the war to be near its end.

Analysts at ING warn that the market may be getting ahead of itself, however.

“The question now is whether the Strait of Hormuz will reopen soon or the extended ceasefire will only lead to another prolonged stalemate,” said ING market strategist Francesco Pesole on Friday.

Reality on the ground

In February, before the war started, more than 20% of the world’s energy supply transited through the strait off Iran’s southern coast to reach global markets.

But in the months since, vessel traffic has been almost nonexistent — the bottleneck being the primary reason for the sharp rise in global energy prices.

Who will control the crucial waterway and what, if anything, Iran would demand from shippers in exchange for safe passage are still massive, unanswered questions.

Chevron CEO Mike Wirth said Friday that the company would not consider paying a toll or fee to Iran or any other authority to get its ships out of the strait, something that Iran has proposed but which the U.S. says is a deal-breaker.

Even once the war is over, “it’s going to take months … to make sure that the mines have been cleared, to get 2,000 ships out” of the strait, Wirth said on Bloomberg Television. “They don’t all go out at once, you need weeks and weeks.”

Just this week, there were new attacks on ships, “so we see risks very real, still, in that environment,” he added.

Without guaranteed safe passage, transiting the strait is still too dangerous for commercial shipping interests — and their insurance companies — to go ahead with.

The next spike in oil prices

This week, energy industry leaders warned that the oil market is on the verge of higher prices again.

“Commercial inventories of crude oil, of liquids-linked petroleum, gasoline, diesel, jet fuel, they’ve all run down,” to backfill the millions of barrels per day that can’t be shipped through the Strait of Hormuz currently, Exxon Mobil SVP Neil Chapman said on Thursday. “We’re approaching unheard of inventory levels.”

“Once you get to that point, then you’ll see price shoot up,” Chapman said at Bernstein’s Strategic Decisions Conference in New York City. He predicted that this would happen in the coming weeks, and that some oil prices could shoot up above $150 per barrel, from around $100 currently.

If crude spikes to $150, the price of a gallon of gas “will be $9 in California, and that will be a serious issue,” he added.

A spike of this size would also impact prices far beyond gas, said Chapman, because “crude oil goes into virtually everything around us.”

Chevron’s Wirth issued the same warning on Friday.

“We are steadily drawing inventories down on products, on crude in locations around the world,” Wirth told Bloomberg. “We really are seeing markets tighten.”

“I think June and July are going to be critical months, and you can see the trajectory of these inventories in the data, and it’s concerning,” he added.

Asked to predict where he saw oil prices going next, Wirth replied, “If we were to see an extended constraint on transit out of the Strait of Hormuz, the question is ‘How high is high?’”