Oil prices registered a new decline this Thursday and reached their lowest levels since the beginning of the conflict between Iran, the United States, and Israel. The correction occurred after Washington and Tehran announced a provisional agreement to reduce tensions, reopen the Strait of Hormuz, and advance the easing of certain economic sanctions.
The market reacted quickly to the possibility that a greater volume of Iranian barrels will return to global supply over the coming months. This expectation reduced the geopolitical risk premium that had driven prices during the most intense weeks of the conflict.
Oil Price Falls to Lows Since Conflict Began
Brent crude declined more than 1% to $78.53 per barrel, while West Texas Intermediate (WTI) retreated nearly 2% to $75.31 per barrel.
These prices represent the lowest levels observed since the first trading sessions following the outbreak of the war. Traders consider that the preliminary agreement reduces the risk of severe disruptions in one of the world’s most important energy routes.
Strait of Hormuz Returns to Center Stage
The memorandum signed by the United States and Iran establishes a 60-day negotiation period during which Tehran will guarantee maritime transit through the Strait of Hormuz. The roadmap contemplates that the operational capacity of this strategic route will progressively recover over the coming weeks.
A significant portion of internationally traded oil and gas flows through this route. Any disruption in its operation typically generates strong movements in energy markets.
Likewise, the agreement opens the door to a potential recovery of Iranian exports, a scenario that would increase available supply and alleviate some of the pressures that have affected the market since the onset of hostilities.
Analysts Forecast Gradual Supply Recovery
Various financial institutions estimate that the normalization of energy flows will be gradual. Goldman Sachs anticipates that exports from Gulf countries will recover to pre-conflict levels by the end of July, while oil production could stabilize during the final quarter of the year.
The institution estimates that flows through the Strait of Hormuz could increase by approximately 13 million barrels per day as logistical and commercial operations are restored.
For its part, BNP Paribas considers that prices will hardly return to levels observed before the war. According to its projections, $75 per barrel could become a relatively stable floor due to accumulated supply losses and the growth of global energy demand.
China Adds Pressure on Consumption Outlook
While global supply shows signs of recovery, demand forecasts are also evolving. A PetroChina report anticipates that China’s oil consumption will decrease by approximately 4.9% in 2026 compared to the previous year.
The reduction would be associated with the expansion of new energies and the high prices registered during recent months. Given that China is the world’s second-largest crude consumer, any variation in its demand has the capacity to significantly influence market equilibrium.
Geopolitical Uncertainty Hotspots Persist
Despite the relief generated by the agreement between Washington and Tehran, the energy landscape continues to face risks. During the same day, new drone attacks against Russian oil infrastructure were reported, a reminder that several tension hotspots remain present in key regions for global supply.
For now, investors are closely monitoring the evolution of negotiations between the United States and Iran and the speed at which energy flows are restored through the Strait of Hormuz, factors that will determine the future direction of oil prices.
Source: Reuters
Photo: Shutterstock
