US-Iran peace deal: Oil prices hovered near a three-month low on Wednesday, 17 June, as investors evaluated the likelihood of the Iran conflict coming to an end and the reopening of the Strait of Hormuz.
Brent crude remained below $80 per barrel after tumbling 15% over the previous four sessions, marking its longest losing streak of the year. Meanwhile, West Texas Intermediate traded around $77 per barrel.
Despite the rebound, both benchmarks had declined nearly 5% on Tuesday, marking a second consecutive session of losses and hitting three-month lows, amid expectations that a potential US-Iran agreement could help restore oil shipments through the Strait of Hormuz.
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The key details of the interim peace agreement between US and Iran started to surface on Tuesday. US President Donald Trump said that the deal would prevent Tehran from developing a nuclear weapon, while a US official was quoted as saying by Reuters that Iran would be permitted to resume oil exports once the agreement is signed.
The memorandum of understanding, which has not yet been made public, extends the fragile ceasefire announced in April by an additional 60 days, providing more time for negotiations aimed at securing a lasting peace agreement.
As part of the arrangement, the US is expected to lift restrictions on Iran’s ports, while Tehran would facilitate oil tanker movement through the Strait, which has been effectively disrupted since the US and Israeli strikes on February 28.
However, industry experts caution that restoring oil production and refining operations to pre-conflict levels could take anywhere from several weeks to years.
Israel has kept its distance from both the April ceasefire and the latest US-Iran accord, raising concerns over the durability of the new truce.
In a separate development, Israeli drone strikes reportedly hit three vehicles in southern Lebanon on Tuesday, killing at least four people and injuring several others, according to Lebanon’s National News Agency. Trump also publicly criticized Israel’s military actions, an unusual move for the US president.
(With inputs from Reuters)
Disclaimer: This story is for educational purposes only. Please consult with an investment advisor before making any investment decisions.
