By National News Desk
Global oil prices fell sharply on Thursday, reaching their lowest levels since the outbreak of the recent United States-Iran conflict, following an interim agreement between Washington and Tehran that eased concerns over disruptions to global crude supply.
Brent crude futures declined by $1.53, representing a 1.9 per cent drop, to settle at $78.02 per barrel. Similarly, U.S. West Texas Intermediate (WTI) crude fell by $2.22, or 2.9 per cent, to $74.57 per barrel.
The decline marked Brent crude’s lowest level since trading resumed after the initial U.S.-Israeli strikes on Iran, while WTI touched its weakest point since early March.
Market analysts attributed the slump to growing expectations that Iranian oil exports could increase following the signing of a 14-point memorandum of understanding between the United States and Iran aimed at reducing tensions and stabilising energy markets.
According to market analyst Tony Sycamore of IG, investors are increasingly pricing in a quicker-than-expected return of Iranian crude to the global market, contributing to the sustained selloff in oil prices.
Under the agreement, Iran will permit toll-free passage through the Strait of Hormuz for a 60-day negotiation period. The strategic waterway, which handles a significant portion of the world’s oil and gas shipments, is expected to return to full operational capacity within 30 days under the terms of the deal.
Industry experts predict a gradual restoration of oil flows through the Strait of Hormuz. However, they note that prices may not experience a dramatic collapse due to resilient global demand and the need to replenish inventories.
Investment banking giant Goldman Sachs projects that Gulf oil exports will return to pre-conflict levels by the end of July, with crude production expected to fully recover by October. The firm estimates that the normalisation process could add approximately 13 million barrels per day in oil flows through the Strait of Hormuz.
Despite the recent decline, analysts at BNP Paribas maintain that oil prices are unlikely to return to levels seen before the conflict. The bank projects that crude prices will find a stable floor around $75 per barrel, citing ongoing supply constraints and sustained global demand.
The latest developments signal a potential easing of pressure on global energy markets after weeks of volatility triggered by geopolitical tensions in the Middle East.
