Oil prices fall 5% to 3-month low on hopes Strait of Hormuz will open

By Scott DiSavino

NEW YORK, June 16 (Reuters) - Oil prices fell astir 5% to a three-month debased connected Tuesday arsenic traders hoped the U.S. and Iran would hold to extremity the warfare and let lipid to travel done the Strait of Hormuz.

Prices, which were already down astir 4% ‌Tuesday morning, extended those losses pursuing a Wall Street Journal study that the U.S. would let Iran to instantly statesman selling lipid and substance nether the ‌memorandum of understanding.

Brent crude futures fell $4.25, oregon 5.1%, to $78.92 a tube astatine 12:02 p.m. ET (1602 GMT). U.S. West Texas Intermediate crude fell $4.80, oregon 5.9%, to $75.95.

The driblet enactment Brent connected way for its lowest adjacent ​since March 2 and kept it successful technically oversold territory for a 3rd time successful a enactment for the archetypal clip since October 2025. WTI was connected way for its lowest adjacent since March 4.

The U.S.-Iran warfare started connected February 28. On February 27, Brent closed astatine $72.48 a tube and WTI closed astatine $67.02.

On Monday, lipid prices sank astir 5% aft U.S. President Donald Trump announced an interim woody to extremity the U.S.-Israeli warfare with Iran. On Tuesday, Trump said the substance would beryllium made nationalist soon.

Still, doubts swirled astir the ‌interim U.S.-Iran woody to extremity the war. Experts warned that ⁠shipping and vigor exports could instrumentality weeks to recover.

"For now, a large ballot of assurance is being applied to the occurrence of this program with constricted respect to thorny issues specified arsenic fiscal compensation, sanctions and particularly a satisfactory atomic woody that was mostly ⁠the crushed down the war," analysts astatine vigor advisory steadfast Ritterbusch and Associates said successful a note.

The interim woody would widen a tenuous ceasefire announced successful April by different 60 days and reopen the strait, which Iran has efficaciously blocked since the U.S. and Israel archetypal attacked Iran. About 20% of planetary lipid supplies passed done the strait earlier the war.

After quality ​of ​the preliminary statement connected Monday, concern banks, including Goldman Sachs, Morgan Stanley and Citi, lowered their ​oil terms forecasts.

AROUND THE WORLD

Other factors weighing connected lipid prices included ‌worries astir China's economy, rising planetary ostentation and involvement rates, and U.S. calls for bid betwixt Russia and Ukraine.

In China, the world's second-biggest system showed expanding unevenness successful May.

Trump said Russia should marque bid with Ukraine, and that helium would effort to help, aft Group of Seven leaders met Ukrainian President Volodymyr Zelenskiy connected Tuesday.

A colony successful the Ukraine warfare could effect successful the lifting of immoderate sanctions connected Russia, which could let Moscow to export much oil. Russia was the world's third-biggest crude lipid shaper down the U.S. and Saudi Arabia successful 2025, according to U.S. vigor data.