The United States and Iran signed an interim memorandum of understanding to end their conflict and reopen the Strait of Hormuz, a critical oil shipping chokepoint, as reported on 19 June 2026. Donald Trump signed the draft agreement, with 60-day extended negotiations agreed as part of the framework. However, peace talks in Switzerland were abruptly cancelled on Friday, raising questions about the deal's stability.
August WTI crude futures fell $7.22, or 8.73%, to settle at $75.22, having traded in a weekly range of $72.83 to $81.00, as traders removed a geopolitical risk premium previously built in around Persian Gulf supply disruption concerns. Brent crude dropped below $77 per barrel following confirmation of the MOU and Strait of Hormuz reopening. Shipping through the Strait normalised during the week, easing supply concerns that had weighed on global crude markets.
In energy, WTI and Brent crude were the directly affected instruments, with both contracts registering sharp weekly losses tied to the removal of the supply-disruption premium. The energy sector broadly, including US-listed oil and gas equities, featured in coverage alongside shipping, given the Hormuz chokepoint's role in global crude transit.
Political risk analysts noted significant uncertainties remaining around Iran's nuclear programme, the sanctions relief framework, ballistic missile restrictions, and Israel's involvement in Lebanon. The IEA separately projected a global oil surplus exceeding 5 million barrels per day in 2027, contingent on Middle East production recovery following the agreement.
Sources: Oilprice, Bloomberg Markets, Finnhub, Guardian Business, Marketwatch TOP, SKY Business, Cnbc TOP