Brent crude oil prices hit pre-Iran war lows after ceasefire deal

Oil prices fell to their lowest level on Thursday since the Iran war began in late February as an interim deal to end fighting, reopen the Strait of Hormuz and ease sanctions on Tehran boosted the global supply outlook.

Brent crude futures were down $1.85, or 2.33%, at $77.69 a barrel at 11:15 a.m. CDT (1615 GMT), while U.S. West Texas Intermediate was down $1.89, or 2.46%, at $74.90 a barrel.

Brent hit its lowest level since February 27, the last day of trading before the initial US-Israeli attack on Iran, while WTI was at its lowest level since March 4.

“The potential reopening of the Strait of Hormuz would eliminate the large risk premium baked into crude (from) a 20% disruption to global oil flows,” Phil Flynn, senior analyst at Price Futures Group, said in a morning note.

“While some say full normalization could take weeks — insurance, repairs, easing of sanctions — but the direction is clear, and ⁠as we’ve found the more pessimistic timelines (have) proven to be too pessimistic,” Flynn said. The 14-point agreement between the United States and Iran begins a 60-day negotiation period during which Iran will allow toll-free passage through the Strait of Hormuz. The deal calls for traffic through the strait to be restored to its full capacity within 30 days.

The initial agreement defers several more difficult issues, such as Iran’s nuclear program, and also requires the United States and its partners to come up with a $300-billion plan to finance Iran’s recovery. Analysts expect a gradual recovery in flows through the Strait of Hormuz, while industry experts have warned that prices will not fall as demand recovers and inventories are replenished.

Investment bank Goldman Sachs expects Gulf exports to return to pre-war levels by the end of July, with crude output recovering by October.

The Bank estimates that a normalization of exports to pre-war levels could increase Hormuz flows from current levels to about 70% of pre-war levels with an increase of 13 million barrels-per-day.

BNP Paribas currently does not expect a return to pre-war prices and sees $75 per barrel as a sustainable floor for the foreseeable future,” it said in a note, given the ongoing supply deficit and high demand. Brent traded around $60 to $70 per barrel in the first two months of the year before the war.

China, the world’s second-largest oil consumer, forecasts consumption of 753 million metric tons in 2026, down 4.9% from 2025 amid the direction of new energy and higher oil prices, according to a report published by PetroChina Research Unit. Ukrainian drones hit an oil refinery in the Russian capital for the second time this week in what Ukraine presents as a demonstration of its growing capabilities.