Brent crude traded below $83 per barrel on Tuesday after tumbling nearly 5% in the previous session, as investors awaited further details of a preliminary peace agreement between the United States and Iran that could restore oil flows through the Strait of Hormuz, one of the world’s most important energy shipping routes.
Brent was trading at around $82.72 per barrel, while U.S. West Texas Intermediate (WTI) hovered near $80.51, extending losses that began after U.S. President Donald Trump announced that Washington and Tehran had reached an interim agreement to halt hostilities and reopen the strait.
The Strait of Hormuz, which carries about 20% of global oil supplies, has faced severe disruptions since conflict escalated in late February. The prospect of its reopening has prompted traders to unwind some of the geopolitical risk premium that had pushed oil prices above $90 per barrel earlier this month.
However, uncertainty surrounding the agreement has limited further declines. Neither Washington nor Tehran has publicly released the full text of the memorandum of understanding, and industry participants remain cautious about how quickly oil exports and shipping operations can return to normal. Several shipping companies have reportedly delayed sending vessels through the route until greater clarity emerges on security arrangements and implementation timelines.
According to Reuters, the preliminary accord would extend a ceasefire for 60 days and pave the way for the reopening of the Strait of Hormuz, though negotiations on broader issues, including Iran’s nuclear programme, are expected to continue. Market analysts estimate that production and tanker flows could recover gradually in the coming months if the agreement holds.
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The oil market has also been pressured by weaker underlying demand signals. Reuters reported that China’s crude oil imports fell 29% in May to their lowest level in eight years, while strong U.S. exports have added to supply availability in global markets.
Brent has now fallen from levels above $93 per barrel seen last week as optimism over a potential resolution to the conflict has grown, with investors increasingly focusing on the possibility of restored supply flows from the Gulf region.
