Washington and Tehran pact supports oil prices
Crude oil (Brent) prices have fallen to their lowest levels in three months following the announcement of a peace agreement between the United States and Iran, which is expected to gradually restore oil flows through the Strait of Hormuz to normal levels. This has led to the fading of the geopolitical premium that previously added risks to prices due to supply threats, shifting the market's focus from shipping and conflict risks to fundamental factors such as weak demand and abundant production. As the risks of conflicts diminish, the market is now questioning how much global demand can justify high prices, while the OPEC+ alliance anticipates lower pressures to support prices, given the UAE's departure from the quota system and the changing role of oil markets.
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