Brent crude fell below $80 a barrel on Tuesday for the first time in months as investors reacted to the newly announced U.S.-Iran agreement, easing fears of a prolonged conflict in the Middle East and a disruption to global energy supplies.
The sharp decline extended a broader selloff that began after Washington and Tehran agreed to halt hostilities and launch a new round of negotiations focused on Iran's nuclear program. Markets interpreted the development as a sign that oil exports through the Persian Gulf could gradually normalize, reducing the risk premium that had driven prices higher during the conflict.
By mid-morning trading, Brent crude, the international benchmark, had fallen more than 4% to $79.79 a barrel. U.S. West Texas Intermediate crude dropped even further, trading just above $77 a barrel.
The move marked a dramatic reversal from recent highs reached during the conflict, when traders feared that disruptions in the Strait of Hormuz could significantly tighten global supply. Roughly a fifth of the world's oil shipments pass through the strategic waterway.
Despite the market's optimism, analysts cautioned that a full return to pre-conflict conditions could take considerably longer than the initial price reaction suggests.
Société Générale strategist Kit Juckes noted in a research note that while prices have already retraced much of their wartime surge, the final stage of normalization may prove more difficult.
Even if the diplomatic breakthrough holds, physical challenges remain. Maritime security experts have warned that mines reportedly deployed by Iran in the Strait of Hormuz could delay the restoration of normal shipping operations.
According to Reuters, Western maritime security sources estimate mine-clearing efforts could require 40 to 50 days after a formal agreement is implemented. Until safe navigation routes are verified, many shipping companies are expected to remain cautious.
"We still consider it very risky for ships to commence transits at this point," Jakob Larsen, chief safety and security officer at shipping association BIMCO, told Reuters. "The threat of mines in the area remains a concern immediately as well as further down the line and mine-free routes need to be established."
The hesitation reflects the enormous financial stakes involved. Reuters noted that a fully loaded supertanker and its cargo can be worth approximately $300 million, making shipping firms reluctant to take risks before security conditions improve.
Meanwhile, questions about the durability of the agreement continue to emerge inside the Trump administration itself.
Axios reported that CIA Director John Ratcliffe, Secretary of State Marco Rubio and Defense Secretary Pete Hegseth have expressed skepticism about whether Iran intends to honor key nuclear commitments contained in the proposed framework.
According to Axios, intelligence assessments reviewed by senior officials suggested discrepancies between what Iranian officials were telling negotiators and what they were discussing internally.
"The intelligence reflects that the Iranian intentions are not in line with their commitments under the deal," a source familiar with the intelligence told Axios.
The White House pushed back on concerns that divisions within the administration could undermine the agreement.
"President Trump listens to all opinions on any given issue - but everyone understands he is the final decision-maker," a White House official said.
The official also defended the memorandum of understanding, stating: "This MOU meets all of the redlines that the administration has long articulated by ensuring that Iran can never possess a nuclear weapon, they cannot keep their highly enriched uranium, and they cannot hold the world's energy supply hostage."
