Oil Falls to Multi-Month Lows as US-Iran Deal Moves Toward Implementation and Hormuz Reopens

The geopolitical risk premium that pushed crude above $100 a barrel earlier this year continued to fall on Wednesday. Brent crude traded near $76 a barrel, according to market reporting, as the United States and Iran moved to put their war-ending agreement into practice and the threat to Gulf shipping eased.

The Islamabad Memorandum, signed remotely on June 17 by US President Donald Trump and Iranian President Masoud Pezeshkian, sets a 60-day timeline to resolve the question of Iran's nuclear program and commits both sides to end hostilities, lift restrictions on the Strait of Hormuz, draw down US military assets in the region, and ease sanctions on Tehran. Washington also granted Iran a 60-day license to sell oil on international markets, a step investors expected would speed the return of barrels to global supply.

Governments describe the agreement in sharply different terms. The head of Iran's negotiating team, parliament speaker Mohammad Bagher Ghalibaf, called the understanding "America's declaration of defeat" and said it resulted from Iranian resistance rather than pressure, a description echoed in Iranian state coverage. In Washington, Secretary of State Marco Rubio traveled to the United Arab Emirates to reassure partners about the tentative terms. Rafael Grossi, director general of the International Atomic Energy Agency (IAEA), said inspections of Iran's nuclear sites "are going to happen" after the two governments issued contradictory statements.

Oman said it had established temporary maritime corridors in coordination with the International Maritime Organization to help vessels leave the area safely, and said no tolls would be charged. The strait carries a large share of the world's seaborne crude, and its reopening is the clearest sign yet that the disruption to trade is easing.