Oil markets just got a reality check. Pakistan’s Prime Minister Shehbaz Sharif announced on June 12 that a final text for a US-Iran peace agreement has been completed, and crude prices responded by cratering to levels not seen in three months.
WTI crude dropped to between $84 and $87 per barrel, while Brent crude fell to the $88 to $90 range. Brent saw sessions with declines exceeding 3% as the peace deal reports gained traction.
What the deal actually includes
The agreement reportedly contains several concrete provisions that directly affect global energy supply. The most consequential element: reopening the Strait of Hormuz. Roughly one-fifth of the world’s oil passes through that narrow waterway.
Beyond the strait, the deal includes sanctions waivers on Iranian oil exports, the potential release of frozen Iranian assets, and a ceasefire framework building on earlier conflict de-escalation.
