US-Iran peace deal: Oil prices fell to their lowest levels since March on Monday, June 15, after US President Donald Trump and Iran’s deputy foreign minister announced that they had reached a preliminary agreement to end the conflict and restore shipping through the Strait of Hormuz.
futures dropped $3.58, or 4.1%, to $83.75 per barrel, while US West Texas Intermediate (WTI) crude declined $4.01, or 4.72%, to $80.87 per barrel. Both benchmarks had already registered losses of more than 3% in the previous session.
Back home, crude oil prices on the Multi Commodity Exchange (MCX) also witnessed a similar downward movement, tracking weakness in global prices. MCX crude oil prices tanked 5.32% to ₹7,544 per barrel.
What’s weighing on crude oil prices?
The United States and Iran are set to sign a memorandum of understanding in Switzerland on Friday, according to Pakistan’s prime minister, whose government has played a mediating role in the talks. On Sunday, Trump stated that the Strait of Hormuz would reopen without any transit charges and that the US naval blockade on Iranian ports would be lifted.
Iran’s semi-official Mehr News Agency was quoted as saying by Reuters that the draft agreement proposes reopening the Strait of Hormuz within 30 days under arrangements overseen by Iran.
Global energy markets have remained highly sensitive to developments in the conflict since it began in late February, when the US and Israel launched attacks on Iran aimed at limiting its nuclear program. Iran retaliated with strikes across the Persian Gulf and closed the , a critical route that typically handles around 20% of global oil shipments. In response, U.S. forces imposed a blockade on vessels linked to Iran.
Although oil prices surged in the early stages of the conflict, they have retreated in recent weeks amid growing expectations of a diplomatic breakthrough between Washington and Tehran and indications that some crude shipments through the strait have resumed.
Additional factors easing market concerns include the release of emergency oil reserves by developed nations and reduced crude imports by major buyers, particularly China.
Crude oil price outlook
Anindya Banerjee, Head of Commodity and Currency Research, Kotak Securities, believes that in the near term, is likely to be heading towards $70–73 as the deal is signed and traffic resumes, with scope for further downside into the second half of the year as the market’s pre-war surplus re-emerges.
“The one caveat: until the agreement is actually signed and the strait is verifiably open, a degree of risk premium will, and should, remain,” Banerjee said.
On the technical outlook, Ponmudi R, CEO of Enrich Money, said that the decisive break below the ascending trendline on the weekly close suggests a shift in market structure, with bearish momentum gaining traction following the sharp unwind in geopolitical risk premium.
“Immediate resistance stands at ₹8,220– ₹8,280; a sustained move above this band could extend momentum toward ₹8,400– ₹8,500. On the downside, ₹7,960 acts as immediate support; a break below this level could extend bearish momentum toward ₹7,880– ₹7,700. The weekly candle forms a strong bearish candle, with MACD reinforcing the bearish signal and suggesting possible further near-term weakness,” Ponmudi added.
(With inputs from Reuters)
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