Brent crude futures dropped below $79 per barrel on Tuesday, marking their lowest point since March 2026. The catalyst: a digitally signed peace agreement between the United States and Iran that promises to reopen the Strait of Hormuz and return Iranian oil to global markets almost immediately.
What the deal actually includes
The agreement, which was formally announced on June 14-15 with an official signing scheduled for June 19 in Geneva, centers on three core provisions. First, the Strait of Hormuz will be reopened to unrestricted commercial shipping. Second, the US naval blockade on Iran will be lifted. Third, Iranian oil exports will be allowed to flow back into global markets.
For context, the Strait of Hormuz carries roughly 20% of global oil flows. Shutting it down was the energy market equivalent of closing three lanes on a five-lane highway during rush hour.
The framework includes a 60-day Memorandum of Understanding period for continued negotiations on thornier issues, particularly Iran’s nuclear program. The initial focus is deliberately narrow, prioritizing energy flow restoration over a comprehensive diplomatic resolution.
