Oil markets remained under pressure on Tuesday, extending losses from the previous session as investors looked for further details on the interim peace agreement between the United States and Iran, which is expected to pave the way for the reopening of the Strait of Hormuz.
By 09:09 GMT, Brent crude for August delivery had fallen 2.1% to $81.41 per barrel, while July West Texas Intermediate crude declined 2.4% to $78.83 per barrel.
Crude Extends Sharp Selloff
Both benchmarks had already dropped nearly 5% on Monday after Washington and Tehran announced a preliminary accord that would prolong the ceasefire introduced in April by an additional 60 days and facilitate the reopening of the strategically important Strait of Hormuz.
The decline erased much of the geopolitical risk premium built into oil prices during the Gulf conflict, leaving Brent and WTI at their lowest settlement levels since March.
Focus Shifts to Implementation Timeline
Attention has now turned to how quickly the agreement can be implemented and how soon oil exports through the region can return to normal levels.
President Donald Trump has indicated that the Strait of Hormuz could be fully reopened by Friday, when U.S. and Iranian officials are expected to meet in Switzerland to formally sign the interim agreement.
Despite the market’s positive initial reaction, analysts caution that uncertainties remain surrounding the practical execution of the deal.
Shipping and Supply Questions Remain
Market participants continue to monitor issues including maritime security, insurance costs and the speed at which vessels affected by the disruption can resume operations.
Several financial institutions have warned that rebuilding inventories and restoring normal shipping activity may require weeks or even months, even if the agreement proceeds as planned.
As a result, some analysts believe energy markets could remain sensitive to any delays or complications during the reopening process.
OPEC Cuts Demand Growth Forecast Again
Adding to pressure on oil prices, OPEC last week reduced its outlook for global oil demand growth in 2026 for a second consecutive month.
The producer group now expects demand to increase by approximately 970,000 barrels per day next year, compared with its previous forecast of 1.17 million barrels per day.
Risk of Volatility Persists
Oil inventories were significantly depleted during the closure of the Strait of Hormuz, leaving markets vulnerable to any setbacks in negotiations or delays to the restoration of normal trade flows.
Analysts noted that any deterioration in the diplomatic process could quickly revive supply concerns and trigger renewed volatility across global energy markets.