Oil falls to lowest since start of Iran war
- By Reuters -
- Jun 18, 2026
LONDON, June 18: Oil prices fell 2% on Thursday to their lowest since the first trading day of the Iran war, as a US-Iran interim deal to end the war, reopen the Strait of Hormuz and ease sanctions on Tehran boosted the global supply outlook.
Brent crude futures were down $1.59, or 2%, at $77.96 a barrel as of 0811 GMT, while U.S. West Texas Intermediate fell $1.83, or 2.38%, to $74.96 a barrel.
Brent sank to its lowest since March 2, which was the first day of trading after the initial U.S.-Israeli strikes on Iran, while WTI was at its lowest since March 4.
“The sell-off extended as energy markets continued to aggressively price in a faster-than-expected return of Iranian barrels following the recent U.S.-Iran memorandum of understanding,” IG market analyst Tony Sycamore said in a note.
Petrol Price in Pakistan and other Updates
The 14-point memorandum begins a 60-day negotiation period during which Iran will allow toll-free passage through the Strait of Hormuz, a key oil and gas shipping lane. The deal calls for traffic through the strait to be restored to its full capacity within 30 days.
The preliminary accord defers many of the more difficult issues, such as Iran’s nuclear program, and also requires the U.S. and its partners to come up with a $300 billion plan to finance Iran’s recovery.
Analysts expect a gradual recovery in flows through the Strait of Hormuz, while industry experts have cautioned that prices may not plummet as demand recovers and inventories are refilled.
Investment bank Goldman Sachs expects Gulf exports to normalize to pre-war levels by end-July, with crude production recovering by October.
The bank estimates that a normalization in exports to pre-war levels might be achieved with a 13 million barrel-per-day increase in Hormuz flows from current levels to around 70% of pre-war levels.
“Whilst it does seem the worst is behind us, things are quite a long way off from being normal,” Kpler analyst Matt Stanley said, adding that the war risk premium on prices has been largely priced out.
Oil prices are likely to ease, but not plummet, as countries replenish reserves and as maritime traffic normalises, International Monetary Fund chief Kristalina Georgieva said on Thursday.
International Energy Agency chief Fatih Birol said it was important that negotiations are completed in 60 days, having previously warned that the global economy will enter a “red zone” if the Strait does not reopen by the end of June.
Also weighing on the oil market are ramped-up bets the U.S. Federal Reserve may raise interest rates later this year to rein in inflation, which could slow economic growth and suppress oil demand.