Oil Extends Sharp Decline

Global oil prices continued their retreat on Tuesday, with Brent crude briefly falling below $80 per barrel for the first time since March 3.

The move marks a dramatic reversal from the price surge that followed the outbreak of the Iran conflict in late February. At the peak of geopolitical tensions, both Brent and West Texas Intermediate (WTI) crude climbed toward $120 per barrel as traders feared significant disruptions to global energy supplies.

WTI crude also traded below $78 per barrel, reflecting improving sentiment across energy markets.

Iran Deal Fuels Optimism

The decline accelerated after President Donald Trump announced that the United States and Iran had agreed to the terms of a memorandum of understanding aimed at ending the conflict.

According to reports, the agreement was electronically signed by U.S. and Iranian officials on Monday, with a formal signing ceremony expected to take place in Switzerland later this week.

Although the full details have not been released publicly, the agreement is understood to include the reopening of the Strait of Hormuz and a 60-day negotiation period covering Iran’s nuclear program and future governance of the strategic waterway.

Strait of Hormuz Back in Focus

The Strait of Hormuz remains one of the most important energy transit routes in the world, carrying roughly one-fifth of global oil shipments.

Concerns over restricted access to the waterway were a major factor behind the sharp rise in oil prices during the conflict.

Investors now expect that a reopening of the route could restore disrupted supply flows, ease pressure on global inventories, and reduce the risk premium that had been embedded in crude prices for months.

Market Reaction

The sharp decline in oil prices reflects growing confidence that energy markets may return to more normal trading conditions if the agreement holds.

Lower crude prices could help ease inflationary pressures globally, particularly for fuel, transportation, and manufacturing costs.

Equity markets were comparatively subdued following Monday’s rally, with investors awaiting additional details about the agreement and its implementation timeline.

For now, energy traders appear focused on the prospect of increased supply and reduced geopolitical risk, driving crude prices to their lowest levels in more than three months.