Key facts
- Brent crude futures fell below $79 per barrel, the lowest since March.
- WTI crude futures have fallen to the mid-$70s.
- A digital peace agreement has been signed between the U.S. and Iran.
- The agreement allows for the immediate resumption of Iranian oil sales.
- The Strait of Hormuz is expected to reopen for normal traffic.
Oil prices experienced a significant decline as traders began pricing in an end to the recent Middle East crisis. Brent crude futures dropped below $79 per barrel, marking their lowest point since March, while WTI futures fell into the mid-$70s. This selloff follows months where the market had been focused on supply disruptions, including tanker attacks and damaged facilities. The shift in sentiment is driven by a digitally signed peace agreement between the United States and Iran, which includes the immediate resumption of Iranian oil sales and the reopening of the Strait of Hormuz, a critical chokepoint for global oil flows. Analysts, however, caution that depleted inventories and the logistical challenges of restoring supply chains mean that a quick return to pre-crisis levels may not be immediate. Despite these warnings, traders are actively positioning for a market without the 'war premium' that had previously supported prices.