The oil rally that dominated the first half of 2026 just hit a wall. Brent crude fell 4% to $79.88 per barrel on June 16, while West Texas Intermediate dropped even harder, sliding 4.7% to $76.93, a three-month low.
The catalyst: a framework agreement between the United States and Iran, announced by President Trump on June 14, that kicks off a 60-day negotiation window aimed at ceasing hostilities and reopening the Strait of Hormuz. A formal signing is expected by June 19.
For context, oil was trading above $100 per barrel earlier this year. The retreat to sub-$80 territory effectively erases the entire geopolitical risk premium that built up since late February, when US and Israeli military actions triggered Iranian restrictions on one of the world’s most critical shipping chokepoints.
How the conflict inflated oil prices
The Strait of Hormuz is the narrow waterway between Iran and the Arabian Peninsula through which roughly a fifth of the world’s daily oil consumption passes. When Iran restricted transit through it in late February 2026, the global oil market did exactly what you’d expect: it panicked.
