- Brent crude futures dropped below $80 a barrel on Tuesday
- Prices fell nearly 4% to $79.61 amid easing geopolitical tensions
- The US-Iran interim peace deal eased fears of energy supply disruptions
Brent crude futures fell below the $80-a-barrel mark on Tuesday, extending their decline after an interim US-Iran peace agreement eased concerns over potential disruptions to global energy supplies.
Brent crude was down nearly 4% at $79.61 a barrel, as traders continued to unwind geopolitical risk premiums that had built up during the recent conflict involving the US, Israel and Iran.
The decline comes after the reopening of the Strait of Hormuz following a preliminary agreement between Washington and Tehran. The development follows US President Donald Trump's announcement of an interim deal aimed at ending the US-Israeli war on Iran.
ALSO READ: Oil Prices At Three-Month Low: Brent Crude At $81 As Attention Turns To Hormuz Reopening Plan
Markets are now focused on an interim agreement expected to be signed by Washington and Tehran in Switzerland later this week. While US President Donald Trump has expressed confidence that the Strait of Hormuz will reopen, traders remain cautious as neither side has yet released details of the proposed memorandum of understanding.
Speaking at the G7 summit in France, Trump said the strait would be “open and toll-free” by Friday. However, shipping companies, commodity traders and energy buyers are seeking greater clarity on operational rules and security arrangements before resuming normal traffic through the route.
ALSO READ: US Using Iranian Playbook To Sneak Oil Out Of Gulf Amid Hormuz Row: Report
Before the conflict, roughly one-fifth of the world's oil supply passed through the narrow waterway. Its effective closure over recent months disrupted crude, fuel and liquefied natural gas shipments, forcing countries to draw down commercial and strategic inventories.
Even if a deal is signed, analysts caution that oil flows may not immediately return to normal. Questions remain around maritime safety, insurance costs, vessel scheduling and the removal of restrictions that have hampered shipping activity.
According to shipping intelligence firm Kpler, nearly 300 cargo-laden vessels are currently waiting to leave the Persian Gulf, while a similar number of empty ships are queued to enter the region and load goods. The backlog highlights the logistical challenges that could persist even after a formal reopening.
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