Oil prices have remained near their lowest point in three months, extending a streak of losses to a fourth day as the market anticipates a potential increase in global supply. This expectation arises from a recent U.S.–Iran agreement that could lead to the reopening of the Strait of Hormuz. West Texas Intermediate crude is trading below $77 per barrel, while Brent crude is close to $79 per barrel. Both benchmarks are under pressure from the belief that Iranian oil exports may soon re-enter the global market as part of an interim framework.
The sustained price decline marks the longest losing streak for crude oil this year. Market sentiment has been affected by the expectation that the deal will reduce geopolitical tensions in the Middle East, facilitating the flow of oil through the Strait of Hormuz, a major artery for global energy transport. However, analysts warn that the resumption of shipping activities might be gradual, hindered by security protocols and logistical challenges in the area.
The preliminary agreement includes a 60-day period for negotiations, during which Iran would be allowed to resume oil exports with reduced restrictions. In return, the United States would lift certain sanctions and remove obstacles to maritime traffic in the critical shipping lane. Despite the prospect of increased oil supply from Iran, recent weeks have seen global oil inventories tightening, with significant reductions reported in U.S. crude stockpiles, complicating the landscape for oil prices.
As long-term forecasts increasingly incorporate the possibility of higher Iranian oil production, market participants are closely monitoring whether the agreement will be sustained and how rapidly physical oil flows can return to normal levels. This uncertainty is reflected in futures pricing, which balances optimism for immediate supply increases against concerns over the agreement’s implementation.