Oil slumps to its lowest level since the US-Iran conflict after a ceasefire memorandum eases supply fears and paves the way for resumed flows through the Strait of Hormuz. Brent crude fell sharply on 18-19 June 2026

Global oil prices slumped sharply to their lowest levels since the outbreak of the US-Iran conflict, as an interim 14-point memorandum of understanding between Washington and Tehran raised expectations of increased crude supply and restored shipping through the critical Strait of Hormuz.

Also read: Dangote leads Nigeria fuel price cuts after Iran truce

Brent crude futures dropped $1.53, or 1.9 per cent, to $78.02 per barrel by mid-afternoon GMT, while US West Texas Intermediate crude fell $2.22, or 2.9 per cent, to $74.57 per barrel.

Both benchmarks touched multi-month lows, with Brent reaching levels not seen since the immediate aftermath of initial strikes and WTI sliding to its weakest point since early March.

Market analysts attributed the sharp sell-off to traders aggressively pricing in a faster return of Iranian barrels following the agreement.

IG market analyst Tony Sycamore noted that energy markets continued to factor in the anticipated resumption of exports.

The memorandum initiates a 60-day negotiation period during which Iran will permit toll-free passage through the Strait of Hormuz, with full capacity expected to be restored within 30 days.

The development marks a significant de-escalation after months of heightened tensions that had disrupted Gulf oil flows and pushed prices sharply higher earlier in the year.

Goldman Sachs projects that Gulf exports could return to pre-conflict levels by the end of July, with full production recovery by October, potentially adding substantial volumes through the waterway.

Despite the immediate price decline, analysts struck a note of caution. BNP Paribas maintained that oil prices were unlikely to collapse back to pre-conflict levels, viewing $75 per barrel as a durable floor supported by resilient global demand and the need to replenish inventories.

The agreement has brought welcome relief to energy markets strained by the conflict. It follows intense diplomatic efforts and offers hope for greater stability in one of the world’s most vital shipping routes, through which a significant portion of global oil trade passes.

Economists and industry observers will now watch closely for implementation details, including the pace of demining operations and the lifting of sanctions, which could influence how quickly additional supply reaches international markets.

Also read: Oil prices plunge as Trump signs Hormuz reopening deal

For now, the ceasefire has delivered a powerful signal of reduced geopolitical risk, allowing oil prices to adjust downward in a decisive move welcomed by consumers and importers worldwide.