MW Global oil prices end below $80 for the first time since the Iran war began. Ships still aren't passing through Hormuz.
By Isabel Wang and Myra P. Saefong
The oil market still has to price in the difference between 'oil can flow again' and 'oil is flowing normally, safely and cheaply again,' says one analyst
The number of oil tankers and gas carriers transiting the Strait of Hormuz remains limited, with just five vessels moving through on Monday, according to data from Kpler.
Global oil prices were extending their declines on Tuesday, settling below $80 a barrel for the first time since the start of the Iran war, as a peace deal to reopen the Strait of Hormuz pushed energy prices lower despite data showing only a fraction of normal tanker volumes moving through the key waterway.
The U.S. and Iran on Sunday reached an initial agreement aimed at extending the cease-fire and ending the months-long war in the Middle East. "The deal's all signed," President Donald Trump said on Monday.
The specific terms of the deal have not been released, but it is understood that those will include the full reopening of the Strait of Hormuz on Friday, when Washington and Tehran are scheduled to sign a formal agreement in Switzerland.
So far, the number of oil tankers and gas carriers transiting the Strait of Hormuz remains limited, with just five vessels moving through on Monday, according to data from marine traffic tracking platform Kpler.
"The diplomatic backdrop has improved but remains short of operational normalization," said Kpler's Ana Subasic, trade risk analyst, and Yuan Li, junior risk and compliance analyst. Many key issues are still unresolved, the analysts said, including whether the passage will be toll-free, how routing will be secured and whether Iran's proposed navigation-fee framework, under which Tehran plans to implement a "maritime service fee" for ships moving through the Strait of Hormuz, survives the agreement.
"Until the deal is [officially] signed and a practical safe-passage mechanism is visible on the water, crossings are likely to remain low, selective and exposed to reversal," the Kpler analysts said in a Tuesday client note.
The oil market seems to be pricing in a rapid recovery in global energy supply and ignoring the reality that shipping traffic through the strait has not yet picked up.
The Brent crude contract for August delivery (BRN00) (BRNQ26) was down 5.1% to end at $78.96 a barrel, its lowest settlement level since March 2, which was the first trading day after the Iran war started on Feb. 28. The international benchmark has fallen 15.2% amid a four-session losing streak.
The U.S.-traded West Texas Intermediate contract for July delivery (CL.1) (CLN26) was down 5.8% to settle at $76.05 a barrel, its lowest level since March 4, according to FactSet data.
See: It could take years for oil prices to return to $67 a barrel. Here's why.
Kathleen Brooks, research director at XTB, said the fact that Brent crude dipped below $80 but has not fallen further suggests cargo ships need to "successfully" get through the Strait of Hormuz before oil prices drop more decisively.
"My view is that the first leg lower in oil was already underway before the peace [deal] headline," said Stephen Innes, managing partner at SPI Asset Management.
"But I would not call this a full return to normal yet. I do not think the cease-fire automatically takes Brent straight back to the prewar level near $72 or WTI back toward $67, and certainly not back to the $60 area, without either a much weaker global demand backdrop, a sustained surplus or a real breakdown in producer discipline," he told MarketWatch on Tuesday.
Also read: Oil may move through the Strait of Hormuz first, leaving fertilizer supplies stranded
In Innes's view, the market still has to price in the difference between "oil can flow again" and "oil is flowing normally, safely and cheaply again."
That is where insurance, shipping availability, mine-clearing risk, port congestion and confidence in the 60-day cease-fire window all matter, he added.
-Isabel Wang -Myra P. Saefong
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June 16, 2026 15:19 ET (19:19 GMT)
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