Crude oil prices fell sharply below $80 a barrel for the first time since March after the United States and Iran confirmed a ceasefire extension and agreed to reopen the Strait of Hormuz, with two Iranian tankers making passage through the Gulf of Oman on Tuesday in the first unimpeded movement of Iranian oil since military operations began in February.
Brent crude dropped 5.5 percent to $78.58 a barrel while West Texas Intermediate fell 6.3 percent to $75.66 a barrel, as traders responded to the diplomatic breakthrough by unwinding the risk premium that had accumulated in crude prices since the Strait closure triggered fears of a prolonged global supply shock. Abu Dhabi’s Murban crude, which had surged to $160.50 a barrel in March during peak hostilities, fell toward pre-war levels alongside other Middle Eastern grades.
Oil had climbed from approximately $72 a barrel before the conflict erupted to $126 in April as the combination of military strikes and strait closure removed a waterway through which a significant portion of the world’s seaborne crude had previously passed. The subsequent peace negotiations produced repeated false dawns before the latest agreement, with each round of diplomatic optimism and disappointment driving dramatic price swings.
Goldman Sachs revised its Brent forecast to $80 a barrel for the fourth quarter of 2026, $10 below its prior estimate, and said it expected Persian Gulf exports to return to pre-war volumes by the end of July, a month ahead of its previous assumption. Analysts at Morgan Stanley and Citi similarly lowered their price outlooks. Traders cautioned that the pace of normalization remained uncertain given sea mine concerns and the time needed for shipping companies and insurers to rebuild confidence to transit the waterway.
