US–Iran interim deal boosts supply outlook as Brent and WTI drop around 2%.
Image: CNN
Oil prices fell about 2% on Thursday, hitting their lowest levels since the start of the Iran conflict, after markets reacted to a US–Iran interim agreement aimed at easing tensions and improving global supply flows.
Brent crude futures dropped $1.59 (2%) to $77.96 per barrel, while US West Texas Intermediate (WTI) declined $1.83 (2.38%) to $74.96 per barrel. Both benchmarks reached their weakest levels since early March, when trading was first disrupted by the outbreak of the war.
Market sentiment was driven by expectations that Iranian oil exports could return more quickly than previously anticipated, following the preliminary agreement that includes steps toward reopening the Strait of Hormuz and easing sanctions on Tehran.
Analysts said the prospect of improved supply has significantly reduced the “war risk premium” that had previously supported higher prices. However, some experts cautioned that a full normalization of oil flows may take time, and prices are unlikely to fall sharply due to ongoing demand and inventory rebuilding.
Financial institutions including Goldman Sachs expect a gradual recovery in Gulf exports, with production potentially returning to pre-war levels in the coming months if stability continues. Meanwhile, global economic concerns and expectations of tighter US monetary policy are also weighing on energy demand outlooks.
