Oil Prices Slip Amid Strait of Hormuz Reopening Prospects

Oil prices have dropped to three-month lows influenced by the potential reopening of the Strait of Hormuz, weaker physical demand, and a preliminary Iran war ceasefire agreement lacking full details. Analysts warn of volatility risks, as negotiations on the deal progress and as China’s crude imports decline.

Oil prices plunged to their lowest levels in three months on Tuesday. This was largely due to the market's reaction to the potential resumption of supplies via the Strait of Hormuz and weak physical demand. Details on an initial agreement to end the conflict involving Iran also contributed to the decline.

Brent crude futures plummeted by $1.44 to $81.73 a barrel, while U.S. West Texas Intermediate dropped by $1.55 to $79.20 a barrel, hitting March lows. Initially, prices had fallen almost 5% after U.S. President Donald Trump announced a memorandum with Iran, yet specific details are still unclear.

The closure of the Strait of Hormuz had significantly impacted global oil supply, with many analysts anticipating its reopening, potentially pressuring already soft markets. Experts remain cautious about volatility, as negotiations and strategies continue to evolve in the coming weeks.