Brent slides to $82.72 as US-Iran framework signals Hormuz reopening

Oil extended its decline on Tuesday as traders assessed the prospect of returning supply through the Strait of Hormuz. By 0631 GMT, Brent crude futures had fallen by 45 cents to $82.72 a barrel, while US West Texas Intermediate dropped 24 cents to $80.51. That follows Monday's near-5% fall, which marked the lowest close since 4 March 2025.

The move tracks a memorandum announced by US President Donald Trump to end the US-Israeli conflict with Iran, though full details remain undisclosed. The conflict had closed the Strait of Hormuz, which normally carries one-fifth of global oil supply. Reuters reported that some analysts expect a quick return of flows, with Morgan Stanley estimating 50% of production back by September and 80% by December. Their analysts also flagged weakness in physical markets: high US exports and low Chinese imports, neither of which looks set to shift soon.

The chart below shows Brent over recent months, against which Tuesday's slide and the prospect of returning Hormuz flows can be read.

What this means for UK buyers

For your business, a falling crude benchmark eases one input into wholesale gas and power, but the move is fragile. The Financial Times noted that a permanent truce has not been reached, and Iranian President Masoud Pezeshkian described the deal only as an 'important step'. If you are approaching a renewal, a softer oil complex may improve forward pricing, though the curve will reprice fast on any breakdown in the ceasefire.

Watch these points over the coming weeks:

• Brent front-month (currently $82.72 a barrel)
• WTI front-month ($80.51 a barrel)
• Timing of tanker flow restoration through Hormuz
• The 60-day ceasefire extension due to be signed in Geneva
• The phased easing of the US naval blockade on Iranian ports

The demand side is also soft. S&P Global Platts reporting and the underlying data show China's crude imports fell 29% in May, their lowest in eight years, with Saudi crude purchases expected to ease further in July. That weak import picture is capping any rebound even as the supply outlook improves.

Suvro Sarkar, head of energy research at DBS Bank, said the first phase, signing the 60-day ceasefire extension, is straightforward and buys time. The second phase, the gradual reopening of Hormuz, is what markets will track for physical effect. 'Any deviation from a clean, simultaneous unlocking will lead to renewed volatility in oil prices,' Sarkar warned.

The near-term direction now hinges on execution rather than headlines. Buyers should watch whether tanker flows actually resume on the Morgan Stanley timeline and whether the Geneva extension holds; a clean reopening points to softer forwards, while any stumble brings the risk premium straight back into the curve.