World oil prices continue to fall on June 18 amid President Donald Trump's announcement of a peace deal between the United States and Iran, which, in particular, will allow tanker traffic to resume through the Strait of Hormuz.
Points of attention
- President Donald Trump's peace deal signing with Iran has caused a significant drop in oil prices worldwide.
- The prospect of resumed oil transportation through the strategic Strait of Hormuz has triggered a negative response in energy markets.
Oil prices continue to fall
As noted, oil prices fell by more than 2% after the signing of an interim agreement between the US and Iran.
Brent crude futures fell $1.64, or 2.06%, to $77.91 a barrel. U.S. West Texas Intermediate (WTI) crude fell $1.8, or 2.34%, to $74.99 a barrel.
Both brands have reached their lowest levels in the last three months amid hopes that agreements between Washington and Tehran will allow the resumption of oil transportation through the Strait of Hormuz.
The sell-off has intensified as energy markets continue to aggressively price in a faster-than-expected return of Iranian barrels following the recent memorandum of understanding between the US and Iran, said IG market analyst Tony Sycamore.
The 14-point memorandum of understanding is expected to kick off a 60-day period of negotiations between Washington and Tehran. In particular, Iran must allow free passage of ships through the Strait of Hormuz, and sea traffic is planned to be restored to full force within 30 days.
At the same time, Iranian officials said that the 60-day round of talks would focus exclusively on the nuclear program and sanctions policy.
Recall that Trump, commenting on the situation to reporters after leaving the Palace of Versailles, announced the signing of a peace agreement between the United States and Iran.
According to the draft document, it provides for the gradual lifting of all anti-Iran sanctions and the lifting of the naval blockade of the Strait of Hormuz.
As you know, even after the announcement of the peace agreement, world oil prices fell to their lowest level since March 10.
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