Oil prices tumble to two-week lows as US-Iran peace deal hopes ease supply fears – Firstpost

Global oil prices fell sharply on Monday, with US crude tumbling nearly 5 per cent and Brent crude slipping below $99 a barrel, as optimism over a possible peace agreement between the United States and Iran eased fears of prolonged supply disruptions in West Asia.

US West Texas Intermediate (WTI) crude futures for July delivery fell $4.80, or 4.97 per cent, to $91.80 a barrel, while Brent crude futures for August delivery were down $1.88, or 1.88 per cent, at $98.33 a barrel in volatile trading. Both benchmarks touched their lowest levels in nearly two weeks earlier in the session.

The decline came after US President Donald Trump said on Saturday that Washington and Tehran
had “largely negotiated” a memorandum of understanding on a peace deal that could eventually reopen the Strait of Hormuz.

Before the conflict, the strategically vital waterway handled roughly one-fifth of global oil and liquefied natural gas shipments. Continued disruptions and blockades in the strait have tightened global energy supplies and heightened concerns over inflation and economic growth.

However, major hurdles remain before any final agreement can be reached. Trump said on Sunday that he had instructed US negotiators not to rush into a deal with Iran, signalling that both sides remain divided on several difficult issues, including shipping access and broader security arrangements in the region.

Analysts said the sharp decline in oil prices reflected expectations that geopolitical tensions could gradually ease, allowing some normalisation in energy flows over time.

Despite the market optimism, analysts cautioned that restoring oil exports and shipping operations through the Strait of Hormuz could take several months. Damaged oil and gas infrastructure would require repairs, while shipping routes, insurance coverage and export logistics may also take time to normalise.

The Strait of Hormuz remains one of the world’s most critical energy chokepoints, making developments in the region a key driver of volatility in global crude markets.