Brent crude slid below $79 a barrel this week, hitting roughly $78.94 intraday for the first time in over three months. The catalyst: growing market confidence that a US-Iran framework agreement to reopen the Strait of Hormuz will flood the market with fresh supply.
Oil prices have now cratered approximately 15% over just a few sessions.
What happened and why it matters
The Strait of Hormuz is arguably the most important chokepoint in global energy. Roughly a fifth of the world’s oil supply passes through the narrow waterway between Iran and Oman.
Reports of a US-Iran deal aimed at de-escalating hostilities near the strait have sent traders scrambling to reprice the supply outlook. Earlier in June, escalating conflicts had pushed oil above $90 to $100 per barrel.
