Oil prices slipped on June 19 after tankers began transiting the Strait of Hormuz following a US-Iran interim peace agreement, raising expectations of returning supply from the key global shipping route.
Reuters reported that Brent crude futures fell 54 cents, or 0.68%, to US$78.31 a barrel at 0146 GMT, while US West Texas Intermediate (WTI) dropped 46 cents, or 0.60%, to US$76.14. The more actively traded August WTI contract eased 79 cents to US$75.06.
Both benchmarks had already touched their lowest levels since early March on June 18 after multiple tankers, including three Saudi-flagged vessels carrying about six million barrels of crude, passed through the Strait of Hormuz following the signing of the deal.
Market sentiment was further pressured by expectations that the agreement could unlock more than 85 million barrels of oil previously stranded in the Middle East Gulf, while also paving the way for the lifting of US sanctions on Iranian exports.
Analysts say the reopening of flows through the Strait, through which roughly one-fifth of global oil and liquefied natural gas normally transits, could gradually normalise global trade conditions if the ceasefire holds.
Supply-side responses are also building across the region. Kuwait Petroleum Corp has lifted all force majeure declarations issued during the conflict, while Iraq’s oil ministry said production is set to return gradually to pre-war levels.
However, geopolitical risks remain. Ongoing conflict involving Israel and Hezbollah in Lebanon continues to cloud the durability of the US-Iran agreement, leaving traders cautious over the medium-term outlook for supply stability.
