Global oil prices have fallen sharply following the signing of a memorandum of understanding (MoU) between Iran and the United States, signaling a potential end to months of geopolitical tension that had disrupted energy markets.
International benchmark Brent crude dropped to nearly $77 per barrel, down from almost $90 on June 12. Meanwhile, US West Texas Intermediate (WTI) hovered around $74 per barrel, reflecting renewed optimism among traders over the restoration of oil supplies.
The decline comes after nearly four months of conflict and supply disruptions triggered by military actions involving the United States and Israel in Iran, which had significantly impacted oil shipments through the strategically vital Strait of Hormuz.
Market analysts say oil prices could decline further if diplomatic progress continues and the Strait of Hormuz fully reopens, allowing millions of barrels of stranded crude to flow back into global markets.
According to energy analytics firm Kpler, nearly 93 million barrels of crude oil remain stranded in the Persian Gulf and could enter the market once shipping routes normalize. The firm also noted that an additional 72 million barrels of Iranian oil could be released if Washington eases sanctions on Tehran.
The International Energy Agency has warned that a full normalization of Middle Eastern oil exports could lead to an oversupply in the global market by 2027.
Investor confidence also lifted Asian stock markets, with Japan’s Nikkei 225 rising over 2 percent and South Korea’s KOSPI gaining more than 1.7 percent, as markets reacted positively to easing energy concerns.
