Crude Plummets as US-Iran Peace Deal Reopens Hormuz 

​SINGAPORE — Global oil markets experienced a sharp sell-off on Thursday, June 18, 2026, pushing crude prices to their lowest levels since the outbreak of the US-Iran war nearly four months ago. The downturn comes on the heels of a breakthrough interim peace agreement signed by Washington and Tehran, which has dramatically improved prospects for global energy supplies.

​International benchmark Brent crude futures dropped $1.53, or 1.9%, to settle at $78.02 per barrel. Meanwhile, U.S. West Texas Intermediate (WTI) crude fell $2.22, or 2.9%, to finish at $74.57 per barrel. The losses mark Brent’s lowest point since military operations began on February 28, while WTI plummeted to its weakest valuation since early March.

​Reopening a Critical Chokepoint

​Market panic subsided rapidly after U.S. President Donald Trump and Iranian President Masoud Pezeshkian signed a 14-point memorandum of understanding (MoU) in Versailles, France, aimed at a permanent termination of hostilities.

​The preliminary accord targets the immediate normalization of the Strait of Hormuz—a vital maritime gateway that handles approximately 20% of the world’s petroleum and liquefied natural gas (LNG) supply. The passage had been choked by a double blockade since the conflict escalated.

​Under the new terms, Iran has committed to allowing toll-free commercial passage through the waterway for a 60-day window, with a broader goal to restore the strait to full capacity within 30 days. Shipping data already reflects the shift, with reports indicating that multiple Saudi supertankers carrying millions of barrels of crude have successfully crossed the channel.

​Inundating the Market with Supply

​The aggressive market correction reflects investor expectations of a swift return of Iranian barrels to the global commerce stream. As part of the MoU, the U.S. Department of the Treasury has agreed to grant immediate waivers on Iranian crude oil exports and lift the naval blockade on its ports.

​”The selloff extended as energy markets continued to aggressively price in a faster-than-expected return of Iranian barrels,” noted Tony Sycamore, a market analyst at IG.

ADVERTISEMENT

​Regional producers are already moving to capitalize on the de-escalation. The State-run Kuwait Petroleum Corporation (KPC) officially lifted its wartime force majeure restrictions on Thursday, announcing plans to aggressively ramp up national production from 500,000 barrels per day to 2 million barrels per day within a week.

​Long Road to Full Recovery

​Despite the immediate relief on commodity pricing, energy experts warn that a complete normalization of commercial shipping infrastructure will take time.

​More than 100 tankers remain queued in the Persian Gulf waiting for security clearances. Analysts emphasize that navigating potential naval mines, reorganizing displaced fleets, and the seven-week transit time required for crude shipments to reach major Asian hubs mean that downward pressure on fuel costs at the pump will be gradual rather than immediate.

​The interim framework establishes a 60-day diplomatic window, with technical teams scheduled to convene in Geneva, Switzerland, to hash out permanent terms regarding Iran’s nuclear enrichment limits and long-term Western sanctions relief.