Oil Prices Waver Amid U.S.-Iran Deal Uncertainty

Oil prices fell on Monday to their lowest since March due to uncertain outcomes of a U.S.-Iran preliminary deal. The deal might reopen the Strait of Hormuz but lacks detailed information. Analysts predict supply resumption while pointing out market weaknesses and geopolitical factors affecting future oil prices.

Oil prices declined further on Tuesday as market uncertainty lingered, particularly surrounding the potential reopening of the critical Strait of Hormuz. By 0631 GMT, Brent crude futures dropped 45 cents at $82.72 a barrel, while U.S. West Texas Intermediate fell 24 cents to $80.51 a barrel.

Monday witnessed oil prices plummeting nearly 5% following U.S. President Donald Trump's announcement of a preliminary memorandum with Iran to ease the U.S.-Israeli conflict. The longstanding hostilities had previously led to the strait's closure, disrupting a critical oil supply line that traditionally accounted for a fifth of global oil flow.

Analysts anticipate the strait's reopening but expect several weeks for full recovery of tanker flows. Factors such as high U.S. exports and decreased Chinese imports continue to influence market dynamics. However, the first phase of the U.S.-Iran deal promises a 60-day ceasefire, though the final agreement remains uncertain and could trigger renewed market volatility.