Oil Prices Extend Losses as Markets Await US-Iran Deal Details
Oil prices moved lower on Tuesday after falling to three-month lows in the previous session.
Investors remained cautious as they waited for more information about the US-Iran agreement and the expected reopening of the Strait of Hormuz.
August Brent crude futures declined 0.5% to $82.75 per barrel. Meanwhile, July West Texas Intermediate futures slipped 0.3% to $80.54 per barrel.
Brent and WTI Fall Nearly 5%
Both major oil benchmarks dropped almost 5% on Monday after US President Donald Trump announced an interim agreement with Iran.
The deal would extend the ceasefire introduced in April for another 60 days. It would also allow the Strait of Hormuz to reopen to commercial shipping.
The sharp decline removed much of the geopolitical risk premium that had supported crude prices during the Gulf conflict.
As a result, both Brent and WTI closed at their lowest levels since March.
Markets Await the Reopening of Hormuz
Investors are now focused on when the agreement will take effect and how quickly oil exports can return to normal.
Trump said oil-loaded vessels had already started moving out of the Strait of Hormuz through a southern shipping route that he described as safe and secure.
US and Iranian officials are expected to attend a formal signing ceremony in Geneva on Friday.
However, traders are likely to remain cautious until there is clearer evidence that shipping traffic and energy exports are recovering.
Maritime Security Concerns Remain
The initial market reaction to the agreement has been positive. Still, several important questions remain unanswered.
Shipping companies need greater clarity about maritime security, naval mines and the cost of insuring vessels travelling through the region.
There is also uncertainty about how quickly stranded ships can return to service and whether important shipping lanes can operate normally.
Several financial institutions have warned that restoring inventories and fully reopening transport routes could take weeks or even months.
OPEC Cuts Global Oil Demand Forecast
The Organization of the Petroleum Exporting Countries lowered its forecast for global oil demand growth in 2026 for the second consecutive month.
OPEC now expects worldwide demand to increase by approximately 970,000 barrels per day next year.
That estimate is below its previous forecast of 1.17 million barrels per day.
The revision reflects weaker expectations for global energy consumption and adds another source of pressure to the oil market.
Supply Risks Could Trigger Fresh Volatility
Oil inventories declined significantly while the Strait of Hormuz remained restricted.
Therefore, any delay in reopening the waterway could quickly revive concerns about global energy supplies.
A breakdown in negotiations or renewed regional tensions could also return a geopolitical premium to crude prices.
For now, oil traders are balancing hopes for stronger export flows against the risk that the agreement may take longer than expected to implement.
