Global oil prices fell sharply on Tuesday, reaching their lowest levels in more than three months as optimism grew over a possible agreement between the United States and Iran that could restore the flow of oil through the Strait of Hormuz.
Brent crude dropped about 4 percent to $79.88 per barrel, while US West Texas Intermediate (WTI) crude declined nearly 5 percent to $76.93 per barrel. The decline followed renewed expectations that the ongoing conflict involving Iran could move towards a peaceful resolution.
Markets reacted positively after US President Donald Trump announced an interim agreement aimed at ending the conflict. The proposed deal would extend an existing ceasefire and gradually reopen the Strait of Hormuz, a vital shipping route that previously carried around one-fifth of global oil supplies.
Several major financial institutions, including Goldman Sachs, Morgan Stanley and Citi, subsequently lowered their oil price forecasts. However, analysts cautioned that energy exports and shipping activity may take time to return to normal levels.
Oil prices also faced pressure from concerns over slowing economic activity in China, persistent global inflation, higher interest rates, and growing expectations that a potential Russia-Ukraine settlement could increase global oil supplies.
Investors are now awaiting fresh US inventory data for further signals about market conditions and future price movements.
Oil Prices Drop to Three-Month Low as Hopes Rise for US-Iran Peace Deal
Global oil prices fell sharply on Tuesday, reaching their lowest levels in more than three months as optimism grew over a possible agreement between the United States and Iran that could restore the flow of oil through the Strait of Hormuz.
Brent crude dropped about 4 percent to $79.88 per barrel, while US West Texas Intermediate (WTI) crude declined nearly 5 percent to $76.93 per barrel. The decline followed renewed expectations that the ongoing conflict involving Iran could move towards a peaceful resolution.
Markets reacted positively after US President Donald Trump announced an interim agreement aimed at ending the conflict. The proposed deal would extend an existing ceasefire and gradually reopen the Strait of Hormuz, a vital shipping route that previously carried around one-fifth of global oil supplies.
Several major financial institutions, including Goldman Sachs, Morgan Stanley and Citi, subsequently lowered their oil price forecasts. However, analysts cautioned that energy exports and shipping activity may take time to return to normal levels.
Oil prices also faced pressure from concerns over slowing economic activity in China, persistent global inflation, higher interest rates, and growing expectations that a potential Russia-Ukraine settlement could increase global oil supplies.
Investors are now awaiting fresh US inventory data for further signals about market conditions and future price movements.
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