Global oil prices dropped below $80 per barrel on Tuesday following market optimism over a US–Iran peace agreement and the expected reopening of the Strait of Hormuz, a key global shipping route.
Brent crude, the international benchmark, fell by about 4 percent to $79.87 per barrel—its lowest level in three months—before recovering slightly. Meanwhile, US West Texas Intermediate (WTI) crude dropped around 4.7 percent, slipping below $77 per barrel.
The decline was driven by expectations that the planned reopening of the Strait of Hormuz would ease supply disruptions and reduce geopolitical risk in the oil market. US President Donald Trump said the strategic waterway would be “completely open” once the peace deal is formally signed in Switzerland.
Iranian media also reported that several oil tankers and cargo vessels had already begun passing through the strait, signalling early signs of restored maritime flow.
Despite the drop, traders remain cautious as details of the agreement are still unclear. Analysts warn that uncertainty over Iran’s proposed “service fees” for vessels using the strait could still affect global supply chains and shipping costs.
Financial markets reacted with mixed sentiment. US stocks showed a split performance, with the Dow Jones rising while the S&P 500 and Nasdaq declined slightly. European markets closed higher, while Asian indices were mixed.
Market experts said the easing of tensions has created a “peace dividend” for global markets, although oil prices are still higher than pre-conflict levels due to lingering supply concerns.
At the same time, data from the US Energy Department showed that strategic oil reserves have fallen to their lowest level since 1983, reflecting sustained demand pressures even as geopolitical tensions begin to ease.
Overall, the market outlook remains uncertain as investors await formal signing of the US–Iran agreement and clearer details on its impact on global energy flows.