Oil falls to pre-Iran war lows after ceasefire deal
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Brent crude fell to $71.20 a barrel on Thursday, its lowest since before the Iran-Israel conflict began in April, after a ceasefire agreement between the two countries was announced. The deal, brokered by the UN and Qatar, is expected to ease supply disruption fears that had driven prices above $90. Markets are now pricing in a return of Iranian oil exports, adding to global supply.
The Ceasefire Deal
The ceasefire agreement between Iran and Israel was announced late Wednesday following weeks of indirect talks in Doha. The deal includes a mutual halt to hostilities and a framework for the withdrawal of Iranian-backed forces from southern Syria. UN Secretary-General António Guterres called it 'a critical step toward regional stability.'
Market Reaction
Brent crude settled at $71.20, down 4.3% on the day, while WTI fell to $67.85. The declines erased all gains since April 1, when Iran launched its first direct strike on Israel. Analysts at Goldman Sachs said the ceasefire could remove up to 1.5 million barrels per day of risk premium from oil prices.
Supply Outlook
Iran's oil production, which had fallen to 2.1 million bpd during the conflict, could recover to 3.5 million bpd within six months, according to the International Energy Agency. The return of Iranian barrels comes as OPEC+ is already planning to increase output from October, potentially creating a surplus.
What's Next
The UN Security Council is set to vote on a resolution endorsing the ceasefire on Friday. It remains unclear whether Iran will fully comply with the withdrawal terms, and whether Israel will accept a permanent truce.
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Oil falls to pre-Iran war lows after ceasefire deal
