Global crude oil prices fell again in Thursday morning trading after the United States and Iran signed a peace agreement to end the war, leading to the reopening of the Strait of Hormuz and lifting sanctions on Iranian oil.
Brent crude oil prices dropped 89 cents, or 1.12%, to $78.66 per barrel, while West Texas Intermediate (WTI) crude fell 98 cents, or 1.28%, to $75.81 per barrel.
This decline follows a rebound on Wednesday triggered by a warning from President Donald Trump that the US might attack Iran again if Iranian leaders do not comply with the agreement.
Tony Sycamore, an analyst from IG, said the energy market is assessing that Iranian oil could return to the market sooner than expected after the US and Iran reached a preliminary agreement.
The agreement includes 14 points and sets a 60-day negotiation period. Iran will allow ships to pass through the Strait of Hormuz, a vital global oil and gas shipping route, without fees, aiming to restore full shipping capacity within 30 days.
However, the preliminary agreement has not resolved several key issues, such as Iran's nuclear program, and still requires a $300 billion economic recovery plan.
The International Energy Agency (IEA) warned that if the deal proceeds and the Strait of Hormuz fully reopens, this year's oil supply crisis could turn into an oil glut in 2027.
The IEA expects that oil supply could exceed demand by 5.05 million barrels per day next year after Middle Eastern oil returns to the market.
Meanwhile, the US Federal Reserve (Fed) is considering another interest rate hike this year to control inflation, which could slow the economy and reduce global oil demand.
. Source:channelnewsasia
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