THE MIND OF THE PEOPLE – World crude oil prices are again under pressure after the United States and Iran reached an agreement to end the conflict that has been going on since the end of February 2026. This agreement also reopens the Strait of Hormuz, one of the most important energy shipping lanes in the world which for the last few months has been a source of concern for global markets.
Quoting Reuters, the price of Brent crude oil on Thursday, June 18 2026 fell 89 cents or 1.12 percent to 78.66 US dollars per barrel. Meanwhile, United States West Texas Intermediate (WTI) crude oil weakened 98 cents or 1.28 percent to 75.81 US dollars per barrel.
This decline extends the downward trend in oil prices that has been ongoing since early June. At that time, the price of Brent was still at the level of 97.81 US dollars per barrel. Thus, world oil prices have lost almost 20 percent of their value in just less than three weeks.
US-Iran Deal Eases Market Concerns
The decline in oil prices occurred after the United States and Iran signed a memorandum of understanding (MoU) containing 14 points which became the basis for ending the conflict and reopening international trade routes in the Strait of Hormuz.
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The agreement will be officially signed in Geneva, Switzerland, this weekend with Pakistan acting as mediator. One of the important points in the MoU is Iran’s commitment to open access to international commercial shipping through the Strait of Hormuz during the ongoing negotiation process.
The Strait of Hormuz has a vital role for global energy trade because it is a transit route for around 20 percent of the world’s oil and gas supplies. During the conflict, uncertainty in the region triggered a spike in energy prices and increased market concerns about supply disruptions.
The biggest selling action occurred on Monday, June 15 2026 after United States President Donald Trump announced the framework of the agreement via social media Truth Social. At that time, the price of Brent immediately fell 4 percent to 83.81 US dollars per barrel, while WTI fell 4.7 percent to 80.89 US dollars per barrel.
“The sell-off extended as energy markets continue to aggressively price in a faster-than-expected return of Iranian barrels following the recent US-Iran MoU,” IG market analyst Tony Sycamore said in a note.
Oil Supply Expected to Increase
In the agreement, Iran is said to allow merchant ships to pass free of charge through the Strait of Hormuz for 60 days. Shipping flows are also targeted to return to normal within 30 days.
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President Trump even stated that the Strait of Hormuz would be fully open starting Friday, June 19 2026 without any fees. However, Iranian state media said the fee-free policy only applies during the 60-day transition period before Iran and Oman jointly manage the strait.
Apart from opening shipping lanes, the agreement also opens up opportunities for Iran’s oil exports to return to the international market in large quantities. This condition is one of the main reasons for the weakening of oil prices because the market estimates that global supply will increase significantly.
The International Energy Agency (IEA) even warned that the energy market, which is currently overshadowed by the risk of supply shortages, could turn into a surplus in the next few years.
The IEA estimates that world oil supply has the potential to exceed demand by up to 5.05 million barrels per day in 2027 as production and energy exports from the Middle East region recover.
Normalization Challenges Still Loom
However, industry players assess that the normalization process will not take place instantly. Shipping and security infrastructure in the region still requires post-conflict recovery.
Lipow Oil Associates energy consultant Andrew Lipow said shipping lanes must first be cleared of mines laid during the war.
According to him, this process could take several weeks to six months depending on conditions in the field. Apart from that, the queue of tankers waiting to pass also has the potential to slow down the recovery of trade flows.
International shipping group Bimco also warned that security risks had not completely disappeared despite the deal being reached.
“Due to a lack of detail and a history of overly optimistic assurances, we believe the security situation for the shipping industry remains unstable,” said Bimco Chief Safety and Security Officer Jakob Larsen.
Even though it is still overshadowed by a number of challenges, global financial markets have so far responded positively to these developments. The US-Iran agreement is considered to be an initial step that can reduce geopolitical uncertainty while helping stabilize world energy supplies in the medium term.***
