Oil prices fell by more than $2 per barrel on Thursday after the United States and Iran signed a temporary agreement expected to end their conflict, reopen the Strait of Hormuz, and lift U.S. sanctions on Iranian oil, improving prospects for global oil supplies.
اضافة اعلان
Brent crude futures dropped by $2.14, or 2.69%, to $77.41 per barrel as of 06:16 GMT. U.S. West Texas Intermediate (WTI) crude fell by $2.36, or 3.07%, to $74.43 per barrel.
Brent crude reached its lowest level since March 2, the first trading day after the United States and Israel launched their war against Iran, while WTI touched its lowest level since March 4.
The decline resumed after both benchmarks erased gains made on Wednesday, when U.S. President Donald Trump said he might resume bombing operations if “Iran’s leaders do not behave properly.”
Tony Sycamore, market analyst at IG, said in a note that the sell-off continued as energy markets increasingly priced in a faster-than-expected return of Iranian oil following the memorandum of understanding signed between Washington and Tehran.
The 14-point memorandum provides for a 60-day negotiation period during which Iran will allow toll-free passage through the Strait of Hormuz, a key route for global oil and gas supplies. The agreement also aims to restore shipping traffic through the strait to full capacity within 30 days.
The preliminary agreement postpones several more difficult issues, including Iran’s nuclear program, to later stages and requires the United States and its partners to develop a $300 billion plan to support Iran’s economic recovery.
Analysts remain cautious about how far oil prices may fall in the near term, as supply constraints could persist even after the Strait of Hormuz reopens.
Mukesh Sahdev, Chief Executive of X Analytics energy consultancy, said that the volume of crude oil returning to the market could be limited because some shipments have already been rerouted through alternative arrangements. He added that tanker owners may remain reluctant to return vessels to the region amid concerns that the agreement could collapse.
He further noted that global oil demand may continue growing faster than supply, potentially preventing prices from falling back to pre-war levels.
On Wednesday, the International Energy Agency stated that if the U.S.-Iran agreement is successfully implemented and the Strait of Hormuz is reopened, the current supply shortage could turn into a significant surplus by 2027. In its monthly market report, the agency projected that global supply could exceed demand by 5.05 million barrels per day next year as Middle Eastern oil returns to international markets.
The oil market is also being influenced by growing expectations that the Federal Reserve may raise interest rates later this year to combat inflation, a move that could slow economic growth and reduce oil demand.
Forecasts released on Wednesday showed that nine of the Federal Reserve’s 19 policymakers now believe interest rate increases may be necessary, marking a significant shift from three months ago when none supported such a move.
Reuters
