Global oil markets reacted sharply on Monday (15th June 2026) as expectations of improved energy supplies reduced concerns that had supported higher prices over recent months.
Oil prices fell to their lowest level since March after reports emerged that the United States and Iran had reached an initial agreement aimed at ending the conflict and restoring shipping through the Strait of Hormuz.
Brent crude futures fell US$3.58, or 4.10%, to US$83.75 per barrel, while U.S. West Texas Intermediate crude declined US$4.01, or 4.72%, to US$80.87 per barrel by 0004 GMT.
Both benchmarks had already fallen more than 3% on Friday.
Strait of Hormuz at the Centre of Market Reaction
The market response was driven largely by expectations that oil and gas flows through the Strait of Hormuz could gradually return to normal.
The waterway is one of the world’s most important energy shipping routes and handles around one-fifth of global oil and liquefied natural gas supplies.
According to Pakistan’s Prime Minister, whose country has acted as a mediator, the United States and Iran are expected to sign a memorandum of understanding in Switzerland on Friday.
U.S. President Donald Trump said on Sunday that the Strait of Hormuz would be reopened “toll free” and that a U.S. naval blockade of Iranian ports would also end.
Iran’s semi-official Mehr news agency reported that a draft agreement calls for the Strait to reopen within 30 days under Iranian arrangements.
Markets Begin Removing War Premium
Analysts say traders are now reassessing the geopolitical risks that had been built into oil prices during the conflict.
“The geopolitical risk premium that had been built into crude is now being unwound quite aggressively as traders price in the prospect of restored oil flows,” said Tim Waterer, Chief Market Analyst at KCM Trade.
The conflict disrupted global energy markets for more than three months, removing millions of barrels of oil and gas supplies from international markets.
Investors are now watching how quickly producers can restore output and exports, and whether shipping traffic through the region can return to normal levels.
Uncertainty Still Remains
Despite the latest price decline, analysts caution that oil markets remain sensitive to developments in the region.
Iran’s Deputy Foreign Minister Kazem Gharibabadi said broader negotiations would continue during a proposed 60-day ceasefire period.
Meanwhile, the E4 nations comprising the United Kingdom, France, Germany, and Italy indicated they would be prepared to lift sanctions on Iran in response to progress relating to its nuclear programme.
Analysts note that uncertainty surrounding future negotiations may limit further declines in oil prices.
“Given the uncertainties around the next round of negotiations over the next 60 days, particularly around the nuclear aspect, it’s hard to see crude oil prices falling too much further from here immediately,” said IG market analyst Tony Sycamore.
Last modified: June 15, 2026
