Oil futures fell to their lowest levels in two months on June 12 as traders priced in hopes of a U.S.-Iran peace deal that would reopen the Strait of Hormuz, a critical chokepoint that has disrupted global energy supplies.
West Texas Intermediate crude settled down 3.2% at $84.88 per barrel, marking its lowest close since April 17, according to the Wall Street Journal. Brent crude fell 3.4% to $87.33 per barrel, its lowest since March 5.
The selling pressure intensified after Iran’s semiofficial Mehr News Agency published details of a draft peace agreement between the U.S. and Iran. According to the Quartz report on Yahoo Finance, the 14-point document calls on the U.S. to lift oil sanctions while Iran would be required to reopen the Strait of Hormuz no later than 30 days after a final deal takes effect.
The Strait of Hormuz carries roughly one-fifth of the world’s seaborne oil and liquefied natural gas, according to the Quartz article. Iran has all but closed the waterway since hostilities erupted, driving energy prices higher across global markets. A reopening would immediately ease supply concerns that have kept crude elevated.
Market analysts noted that the price decline reflects both the peace deal optimism and broader structural factors. Pavel Molchanov, investment strategy analyst at Raymond James, told the Wall Street Journal that further significant declines require “actual evidence of recovery in Persian Gulf exports.” He noted that the slide from over $100 a barrel to $85 for WTI “represents the low-hanging fruit,” with politics, shipping, and oil field infrastructure all needing to align for sustained recovery.
A comparable precedent emerged in 2015 when the Joint Comprehensive Plan of Action (JCPOA) Iran nuclear deal lifted sanctions. According to the Council on Foreign Relations, sanctions relief enabled Iran to increase oil exports as inflation slowed, exchange rates stabilized, and exports—especially oil—skyrocketed. That deal also promised to ease global supply constraints, though the market dynamics differed significantly from today’s crisis-driven closure of the Strait.
Sources
- Wall Street Journal — confirmed WTI settlement at $84.88 (down 3.2%) and Brent at $87.33 (down 3.4%), lowest levels since April 17 and March 5 respectively; included analyst commentary from Raymond James on further price declines.
- Yahoo Finance / Quartz — reported draft agreement details, 14-point document, 30-day Strait reopening timeline, and confirmed Strait carries one-fifth of world’s seaborne oil.
- Council on Foreign Relations — provided historical context on 2015 JCPOA sanctions relief impact on Iranian oil exports.
