Crude oil prices are poised for a steep drop this week after a temporary peace deal between the US and Iran allowed shipping through the Strait of Hormuz to begin returning to normal — easing what had been one of the largest supply shocks in the history of the global oil market, Bloomberg reported.
West Texas Intermediate (WTI) crude was holding near $77 a barrel on Friday morning (June 19), trading close to its lowest level since early March after sliding nearly 10% this week. Brent crude sat below $80. Tankers that had been stranded began leaving the strait on Thursday, while Kuwait announced it would start ramping production back up.
US Central Command said it had lifted measures blocking traffic in and out of Iran’s ports and coastal areas. The Joint Maritime Information Center, a key naval intelligence body, advised ships transiting the strait to use a route close to the Omani coast to avoid mines.
US President Donald Trump praised the progress and pushed back against criticism from hawkish voices on Iran — and from some allies who view the deal as conceding too much to Tehran. On social media, Trump said markets had welcomed the development, with oil prices falling sharply and stocks rallying.
The sell-off has erased nearly all of the war-driven premium that had built into oil futures since the conflict erupted in February, after the US and Israel launched strikes on Iran over its nuclear program. The Strait of Hormuz — which links the Persian Gulf to global markets and normally carries about one-fifth of the world’s oil supply — had been under a two-way blockade from both Iran and the US.
Vice President JD Vance played down concerns that Iran might later charge tolls for passage through the strait, a move that could turn the strategic chokepoint into a revenue source for Tehran. He added that a 60-day countdown to finalize disputed details in the memorandum of understanding (MOU) has now begun.
Oil price update, Friday morning (June 19):
- WTI for July delivery was little changed at $76.85 a barrel as of 06:03 Singapore time.
- Brent for August delivery closed Thursday up 0.4% at $79.85 a barrel.
Source: Bangkok Biznews / Bloomberg
