Global oil prices fell below $80 per barrel on Tuesday following renewed optimism over the planned reopening of the Strait of Hormuz, easing concerns about disruptions to global energy supplies.
Brent crude, the international oil benchmark, declined by 4.0 per cent to $79.87 per barrel, falling below the $80 mark for the first time since early March before recovering slightly. Meanwhile, the U.S. benchmark, West Texas Intermediate (WTI), dropped 4.7 per cent to below $77 per barrel.
Market sentiment improved after U.S. President Donald Trump announced that the Strait of Hormuz would be “completely open” once a peace agreement between the United States and Iran is signed in Switzerland on Friday.
Iranian media also reported that three oil tankers and two cargo vessels had successfully passed through the strategic waterway.
Despite the decline in crude prices, analysts cautioned that uncertainties surrounding global oil supplies remain.
They noted that while prices have retreated to their lowest levels in about two months, they are still trading above pre-conflict levels, reflecting lingering concerns over the stability of energy markets.
There are also expectations that shipping through the Strait of Hormuz could face additional costs if Iran imposes transit or service charges on vessels using the route.
In the financial markets, investors remained cautious. The Dow Jones Industrial Average gained 0.8 per cent, while the S&P 500 slipped 0.2 per cent and the Nasdaq Composite declined 0.4 per cent.
Market analysts said investors are consolidating gains recorded in recent sessions while awaiting further details of the proposed U.S.-Iran peace agreement.
Attention is also shifting to a series of central bank policy meetings this week.
The U.S. Federal Reserve is widely expected to leave interest rates unchanged as policymakers assess the economic impact of recent geopolitical developments in the Middle East. The Bank of England is also expected to maintain its current monetary policy stance.
In Asia, the Bank of Japan raised interest rates to their highest level since 1995, leaving the Japanese yen largely unchanged in currency markets.
Meanwhile, U.S. Energy Department data showed that the country’s strategic petroleum reserves declined last week to their lowest level since 1983, highlighting continued demand for stockpile replenishment despite easing geopolitical tensions.
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