Oil prices dropped to their lowest levels since March after the United States and Iran announced an interim ceasefire agreement that includes plans to reopen the Strait of Hormuz and ease certain sanctions on Iran.
Brent crude futures fell 2% to $77.96 per barrel, while West Texas Intermediate (WTI) crude declined 2.38% to $74.96 per barrel. The market reacted positively to expectations that Iranian oil exports could return to global markets and that shipping traffic through the Strait of Hormuz will gradually normalize.
Under the 60-day agreement, Iran has committed to allowing toll-free passage through the strategic waterway, with full traffic expected to be restored within 30 days. Analysts expect Gulf oil exports to recover steadily, although some caution that stronger demand and inventory replenishment could limit further price declines.
Goldman Sachs forecasts Gulf oil exports will return to pre-conflict levels by the end of next month, with crude production fully recovering by October. Meanwhile, Saudi Aramco is reportedly considering expanding its global oil storage capacity to strengthen supply chain flexibility amid changing market conditions.
The ceasefire has eased immediate concerns about supply disruptions, shifting market focus toward future negotiations and the pace of Iranian oil’s return to international markets.
Author: phinds