Key Highlights

  • WTI crude for July delivery fell 1.4% to about $79.67 per barrel.
  • Brent crude declined 1.3% to roughly $82.13 in early Tuesday trading.
  • Hormuz previously handled close to 20% of global crude shipments before the conflict.
  • Tanker operators indicated that normal traffic could take several weeks to resume.

Oil prices extended their decline on Tuesday, with US crude falling below $80 per barrel as markets assessed the reported diplomatic framework between Washington and Tehran.

West Texas Intermediate futures for July delivery traded near $79.67, while Brent crude futures fell to about $82.13. Both contracts reached their weakest levels in roughly three months after a sharp drop in the previous session.

The fall reflected expectations that oil exports from the Persian Gulf could begin moving more freely if the Strait of Hormuz reopens. The waterway has faced severe disruption since fighting began in late February, limiting access to a route that normally carries around one-fifth of global crude supplies.

The provisional arrangement is expected to extend the existing ceasefire for 60 days and restore commercial access through the strait. A formal ceremony is scheduled for Friday in Geneva, while the agreement is expected to feature prominently during G7 discussions in Évian-les-Bains.

The full terms of the memorandum have not been released. That has left energy traders, insurers and shipping companies waiting for confirmation on how the reopening will be enforced and whether security conditions have improved sufficiently.

Container operators have welcomed the prospect of renewed access and indicated that some vessels could attempt passage during the weekend. Tanker companies have taken a more cautious position, with industry executives signalling that large-scale oil transit may not resume immediately.

Shipping decisions will depend on practical security conditions, insurance availability and confirmation that vessels can move without facing fresh military or commercial restrictions. Even after a formal reopening, companies may require additional time before restoring regular schedules.

The difference between financial-market expectations and physical shipping conditions remains central to oil pricing. Futures contracts have moved quickly on signs of de-escalation, but actual supply flows will depend on the return of tankers and the release of delayed cargoes.

Further details of the agreement are expected later this week. Until then, crude prices are likely to remain sensitive to official statements, shipping activity and evidence of renewed traffic through the Strait of Hormuz.