Oil Falls Below $80 on Prospects of U.S.-Iran Agreement


   
Maria Eugenia Garcia
DTN Energy Editor

   HOUSTON, TX (DTN) --Oil futures prices sank below the $80 bbl mark on 
Tuesday (6/16), hitting  three-month lows as prospects for a United States-Iran 
agreement to end hostilities and the reopen the Strait of Hormuz would restore 
disrupted oil supplies.

   The NYMEX WTI for July delivery dropped $4.36, or 5.40%, to $76.39 bbl, its 
lowest close since March 10, when it was at $76.93 bbl, according to DTN data. 
ICE Brent for August delivery declined $3.92, or 4.71%, to $79.25 bbl, marking 
its lowest value since March 6, when it was at $79.86 bbl.

   Downstream, NYMEX ULSD futures for July delivery slid $0.0832 to $3.1833 
gallon, and front-month NYMEX RBOB futures retreated $0.0618 to $2.8854 gallon. 

   The US dollar index remained little changed, up 0.091 points to 99.285 
against a basket of foreign currencies.

   U.S. and Iranian officials are scheduled to sign an interim deal in 
Switzerland on Friday (6/20), that would reopen the Strait of Hormuz. Tehran 
said on Tuesday that the U.S. blockade of Iranian ports is being lifted, while  
vessel-tracking data showed several Iranian oil tankers moving toward the Gulf 
of Oman.

   Hundreds of laden oil tankers remained anchored in the Persian Gulf, with 
only limit traffic through the Strait of Hormuz despite the announcement of a 
peace deal a day earlier, as shippers awaited clearer assurances on 
navigational safety, including the removal of Iranian sea mines. A wave of 
crude oil is expected to flow once a deal is signed, offering a relief to a 
supply-starved market.

   While some analysts expect oil supply to return to pre-war levels by the end 
of July, others are more cautious given the extent and duration of the supply 
disruption. Damaged energy infrastructure, shut-in oil fields and logistical 
hurdles can pump the brakes on the expected supply surge and drag out the 
return of oil output for months.

   Refined fuel spot prices have recently indicated some demand weakness, with 
the premium of physical barrels over futures returning to pre-war levels in 
many markets.

   Downstream, the Energy Information Administration reported on Tuesday that 
the national average for retail regular gasoline declined for a third 
consecutive week in the week ended June 15.  The U.S. average for regular 
gasoline fell 9.4cts to $4.052 gallon last week, while remaining 91.3cts above 
the same week last year and 61.7cts higher than two years ago, the EIA's weekly 
fuel pricing update showed.

   Meanwhile, U.S. average retail diesel prices dropped for a fifth consecutive 
week during the week ended June 15, with the national average easing 15.1cts to 
$5.059 gallon. Compared with the same time last year, diesel nationwide was up 
$1.488 gallon on average.




(c) Copyright 2026 DTN, LLC. All rights reserved.