Oil prices fall 4% to three-month lows amid preliminary Iran deal

Oil prices fell about 4% on June 16, reaching fresh three-month lows as markets reacted to expectations of a potential resumption of supplies through the Strait of Hormuz, alongside weaker physical demand and limited details on a preliminary agreement aimed at ending the Iran conflict.

Brent crude futures dropped $3.20, or 3.85%, to $79.97 a barrel at 1253 GMT. Earlier in the session, prices touched $79.61, the lowest since March 3 and the first time Brent had fallen below $80 since then, Reuters reports. 

U.S. West Texas Intermediate (WTI) declined $3.52, or 4.36%, to $77.23 a barrel. Its intraday low of $76.88 marked the weakest level since March 10.

Before the conflict began on February 28, Brent and WTI futures were trading in the range of around $65–$70 per barrel.

Oil prices had already fallen nearly 5% on June 15 after U.S. President Donald Trump announced an interim deal to end the U.S.-Israeli war with Iran, though full details of the agreement have not yet been released.

Iranian Foreign Minister Abbas Araqchi said on June 16 that Iran and the United States would begin a new round of talks in Switzerland on June 19 aimed at reaching a final agreement.

"Near-term downside risks remain as the market prices a faster reopening of the Strait and a return of stranded barrels," Saxo Bank analyst Ole Hansen said.

However, analysts cautioned that the outlook remains uncertain, pointing to structural factors in the oil market.

Goldman Sachs lowered its fourth-quarter Brent forecast to $80 a barrel from $90 and cut its 2027 average estimate to $75 from $80, saying it now assumes Gulf exports return to pre-war levels by the end of July rather than late August.

By Sabina Mammadli