- Prices at three-month lows, but above pre-war levels.
- Some analysts expect Hormuz flows to resume in several weeks.
- Brent crude futures LCOc1 fell $4.25 to $78.92 a barrel.
Oil prices fell about 5% to a three-month low on Tuesday as traders hoped the US and Iran would agree to end the war and allow oil to flow through the Strait of Hormuz.
Prices, which were already down about 4% Tuesday morning, extended those losses following a Wall Street Journal report that the US would allow Iran to immediately begin selling oil and fuel under the memorandum of understanding.
Brent crude futures LCOc1 fell $4.25, or 5.1%, to $78.92 a barrel at 12:02 pm ET (1602 GMT). US West Texas Intermediate crude CLc1 fell $4.80, or 5.9%, to $75.95.
The drop put Brent on track for its lowest close since March 2 and kept it in technically oversold territory for a third day in a row for the first time since October 2025. WTI was on track for its lowest close since March 4.
The US-Iran war started on February 28. On February 27, Brent closed at $72.48 a barrel and WTI closed at $67.02.
On Monday, oil prices sank nearly 5% after US President Donald Trump announced an interim deal to end the US-Israeli war on Iran. On Tuesday, Trump said the text would be made public soon.
Still, doubts swirled around the interim US-Iran deal to end the war. Experts warned that shipping and energy exports could take weeks to recover.
“For now, a major vote of confidence is being applied to the success of this plan with limited regard to thorny issues such as financial compensation, sanctions and especially a satisfactory nuclear deal that was largely the reason behind the war,” analysts at energy advisory firm Ritterbusch and Associates said in a note.
The interim deal would extend a tenuous ceasefire announced in April by another 60 days and reopen the strait, which Iran has effectively blocked since the US and Israel first attacked Iran. About 20% of global oil supplies passed through the strait before the war.
After news of the preliminary agreement on Monday, investment banks, including Goldman Sachs, Morgan Stanley and Citi, lowered their oil price forecasts.
