LAGOS — Global oil prices plunged over one dollar per barrel Thursday after the United States and Iran signed a historic interim accord effectively ending their recent war and reviving global energy supply certainties.
The groundbreaking agreement guarantees the immediate reopening of the blockaded Strait of Hormuz. It also waives heavy U.S. sanctions on Tehran’s petroleum sector, significantly boosting the near-term global crude outlook.
Brent crude futures fell $1.64, or 2.06%, to $77.91 a barrel early Thursday. Concurrently, U.S. West Texas Intermediate (WTI) futures dropped $1.80, or 2.34 percent, to reach $74.99 a barrel.
The aggressive selloff reflects rapid unwinding of geopolitical risk premiums. Analysts note that clearing the world’s most critical maritime chokepoint defuses severe inventory depletion risks that threatened major economies earlier this year.
The sudden diplomatic breakthrough alters medium-term fundamentals. Energy experts warn that injecting locked-up Iranian barrels back into global trade routes could transition the market from a tight supply squeeze to a massive surplus of over 5 million barrels per day by 2027.
Traders are now recalibrating portfolios as the physical threat to Middle Eastern shipping dissolves, shifting market focus back toward flagging global demand and expanding non-OPEC production capacity through the late 2020s.
