Oil prices drop below $80 after US, Iran sign ceasefire agreement

Oil prices fell more than $1 per barrel on Thursday, June 18, 2026, after the United States and Iran signed ‌an interim agreement that would end the Iran war, reopen the Strait of Hormuz, and waive U.S. sanctions on Tehran’s oil.

Brent crude futures were down $1.64, or 2.06%, at $77.91 a barrel as of 0427 GMT, while U.S. West Texas ​Intermediate fell $1.80, or 2.34%, to $74.99 a barrel.

The benchmarks resumed their decline, reversing gains made on Wednesday after ​U.S. President Donald Trump said he could resume his bombing campaign if Iran’s leaders “don’t ⁠behave”.

“The sell-off extended as energy markets continued to aggressively price in a faster-than-expected return of Iranian barrels following ​the recent U.S.-Iran memorandum of understanding,” IG market analyst Tony Sycamore said in a statement.

The 14-point memorandum begins a 60-day ​negotiation period during which Iran will allow toll-free passage through the Strait of Hormuz, a key oil and gas shipping lane.

The deal calls for traffic through the strait to be restored to its full capacity within 30 days, Reuters reported.

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The preliminary accord defers many ​of the more difficult issues such as Iran’s nuclear programme, and also requires the U.S. and its partners ​to come up with a $300 billion plan to finance Iran’s recovery.

If the U.S.-Iran agreement is successfully implemented and the strait reopened, this year’s supply crisis could turn ​into a significant supply glut in 2027, the IEA cautioned on Wednesday, forecasting in ​its monthly market ⁠report that supply will outstrip demand by 5.05 million barrels per day next year as Middle East oil returns to the market.

Also weighing on the oil market are ramped-up bets the U.S. Federal Reserve may raise interest rates later this ⁠year to ​rein in inflation, which could slow economic growth and suppress oil ​demand.

Nine of 19 Fed policymakers now think a rate hike will be needed, Wednesday projections showed, a departure from three months ago when none ​of them held that view.