Oil prices slipped in early trading on Thursday (Jun 18) after the United States and Iran signed an interim deal to end the war in the Middle East. Shortly after the signing of the US-Iran memorandum of understanding, Pakistan’s Prime Minister Shehbaz Sharif announced that Tehran will reopen the Strait of Hormuz “instantly” and the American blockade of Iranian ports will end “immediately”. The development would mark the end of the largest energy disruption in history that rattled oil prices and global markets.
As of 0005 GMT, Brent crude futures were down by 1.12 per cent, at $78.66 a barrel, while US West Texas Intermediate fell by 1.28 per cent to $75.81 a barrel.
The benchmarks declined once again after briefly rising when US President Donald Trump on Wednesday (Jun 17) threatened Iran with a renewed bombing campaign if Iranians “don’t behave”.
Also read | ‘Unfair for them not to have some’: Trump says Iran can have ballistic missiles as peace deal takes effect
“The sell-off extended as energy markets continued to aggressively price in a faster-than-expected return of Iranian barrels following the recent US-Iran memorandum of understanding,” IG market analyst Tony Sycamore said, as quoted by Reuters.
The 14-point MoU has started a 60-day negotiation period during which Iran will allow maritime traffic to pass through the Strait of Hormuz toll-free. The deal also calls for the key shipping route to be restored to its full capacity within 30 days.
Trending Stories
&im=FitAndFill=(700,400))
Why Russian strike fighters seat pilots side-by-side compared to US jets
)
With all eyes on Vikram-1, Singapore's wealth fund and investment body fuels India's private space era
)
5 times in 40 years: Rare Atlantic Niña could soon grip Earth as Super El Niño tightens its jaws. What to expect?
)
Ukrainian drone travels 2,500 km in 12 hours to attack oil refinery in Siberia, as CIA confirms 30-minute soldier lifespan
&im=FitAndFill=(700,400))
How many missiles does one S-400 have?
)
IND vs ENG, 3rd ODI: When and where to watch live streaming in India?
)
Pakistan in talks for defence pact with Kuwait amid rising US-Iran tensions: Report
)
Abhijeet Dipke announces indefinite hunger strike after Sonam Wangchuk shifted to hospital
&im=FitAndFill=(700,400))
Why Russian fighter jets leave exhaust pipes raw compared to US jets
&im=FitAndFill=(700,400))
New Friday OTT releases (July 17, 2026): Maa Inti Bangaaram, The East Palace, Desire- 5 new movies and TV shows on Netflix, JioHotstar and more
)
As Sonam Wangchuk's protest enters 20th day, his father's 1984 fast that brought Indira Gandhi to Leh returns to focus
)
US-Iran war: US sends dozens of refueling jets to Israel as Iran targets Trump's properties: Reports
)
Homer's Iliad written before The Odyssey found inside an Egyptian mummy
)
Americans need to prove they are American citizens to visit a national park in US
)
Before you buy your Odyssey ticket: The difference between IMAX 70mm and digital explained
)
India’s first night safari: Supreme Court clears massive ₹1,500 crore wildlife project in Lucknow
)
Maha CM Wife Amruta Fadnavis' Yoga Day appearance sparks social media debate over attire | Watch
)
The Odyssey movie review: Christopher Nolan crafts a visual masterpiece that strips the glory from war
&im=FitAndFill=(700,400))
Why Russian aircraft use flexible refuelling hoses compared to US refuelling booms
)
UK court denies bail to Indian merchant navy captain held in Russian oil tanker case
&im=FitAndFill=(700,400))
Why Russian fighter jets mount nose camera balls compared to US jets
)
‘If US attacks continue…’: Khamenei's adviser issued stark warning for Trump, threatens 'full-scale offensive'
&im=FitAndFill=(700,400))
From The Odyssey to Troy: 5 movies based on the legendary Trojan War on OTT platforms
)
Older than Himalayas: 85mn-year-old Kewra plant reached India 24mn years ago, fossil discovery in Assam shows
&im=FitAndFill=(700,400))
'Every launch comes at a price': Why firing an S-400 missile is so expensive
Bhagat Singh, Irom Sharmila, Sonam Wangchuk and more: How one empty stomach shook India | Longest hunger strikes
&im=FitAndFill=(700,400))
How the S-400 tracks multiple targets at once
&im=FitAndFill=(700,400))
'Maintenance, training and missiles': Inside the true cost of operating an S-400 battery
)
Don't know what The Odyssey is? Here's the ancient Greek myth explained simply
)
Sonam Wangchuk attacked on Day 20 of hunger strike? 'Object thrown at' activist alleges Cockroach Janta Party's Abhijeet Dipke | Watch
The preliminary agreement leaves several contentious issues unresolved, most notably Iran’s nuclear programme. It also commits the United States and its partners to developing a $300 billion recovery package aimed at rebuilding Iran’s economy and infrastructure.
Should the deal be fully implemented and the Strait of Hormuz reopened, the current supply crunch could eventually give way to a substantial oil surplus. In its monthly market report released on Wednesday, the International Energy Agency (IEA) stated that global oil supplies could exceed demand by 5.05 million barrels per day in 2027 as Middle Eastern exports return to international markets.
Meanwhile, the US Federal Reserve is increasingly considering the possibility of raising interest rates later this year to curb inflationary pressures. Higher borrowing costs could slow economic activity and weigh on fuel consumption, potentially dampening oil demand.
Nine of the Fed’s 19 policymakers now expect at least one rate hike this year – a notable shift from three months ago, when none anticipated tighter monetary policy.
