Oil prices are tumbling, and risk assets are having a good Monday for once. Brent crude dropped more than 4% to as low as $83.04 on June 15, its weakest level since March 10, while WTI crude slid to approximately $79.72, a decline of as much as 6% intraday.
The catalyst: growing expectations that US-Iran peace negotiations could produce an interim agreement to reopen the Strait of Hormuz, the narrow waterway that carries roughly 20% of global oil flow.
From war premium to peace discount
Oil markets had been running hot. Prices surged over 20% since February 28, fueled by escalating tensions from US and Israeli military actions against Iran earlier in the year. That geopolitical risk premium is now unwinding fast.
A potential interim agreement is reportedly anticipated by June 19, giving traders a concrete timeline to trade around.
