Brent crude oil prices fell below $80 per barrel for the first time since March
The price of Brent crude has fallen below $80 per barrel. This is the first time this has happened since March, Barron's notes.
During trading on June 16, August Brent contracts fell by about 4% to an intraday low of $79.61 per barrel. At the time of publication, Brent is trading at $79.8. Meanwhile, July WTI futures fell to $76.88 per barrel on Tuesday—more than 4% lower than the previous day’s closing price.
Oil prices have been falling for about a week: on Sunday, June 14, it was reported that the U.S. and Iran had reached a preliminary agreement that is expected to reopen shipping through the Strait of Hormuz.
Context
The U.S. and Iran expect to sign a peace agreement as early as Friday, June 19. The parties agreed to an immediate cessation of hostilities, signing, according to The Guardian and Reuters, a framework agreement electronically as early as Sunday, June 14, and the final agreement is expected to set out the terms for de-escalation and the restoration of security in the region.The exact details of the agreement remain unknown at this time. According to U.S. President Donald Trump, one of the outcomes of the deal should be the resumption of shipping through the Strait of Hormuz—a key route for global oil supplies. On Sunday, the U.S. president posted on the social media platform Truth Social: “I hereby fully authorize the duty-free opening of the Strait of Hormuz... Ships of the world, start your engines! Let the oil flow!”
At the same time, the details of the future shipping regime through the Strait of Hormuz remain unclear: Iran, according to The Guardian, citing the Iranian news agency Mehr, claims that the strait will be open within 30 days of the signing of the memorandum of understanding, while Washington insists on free and unconditional navigation without any restrictions or tolls for passing vessels starting June 19.
The agreement to end the war does not resolve the issue of Iran’s nuclear program, which Washington cites as one of the main causes of the conflict. On June 15, Trump reiterated that “Iran will never possess nuclear weapons,” and according to the Associated Press, negotiations on the nuclear deal will continue for the next 60 days following the signing of the preliminary agreement.
This article was AI-translated and verified by a human editor
