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Economy
Jun 12, 2026
Analyzed by GPT OSS 120B

Oil Prices Plummet as Trump Says US‑Iran Deal Nearing Completion

AI Summary
Global oil markets fell sharply on Friday after President Donald Trump announced he was close to a US‑Iran peace deal, sending Brent crude below $85 a barrel. Analysts see the move as a potential catalyst for reopening the Strait of Hormuz and reshaping supply dynamics, though forecasts remain cautious.

Trump's Claim Triggers Oil Price Slide

On Friday, 12 June 2026, President Donald Trump announced that the United States was "close to reaching a peace deal" with Tehran, prompting an immediate sell‑off in global oil markets. The statement came after he called off a planned series of renewed strikes against Iran, raising hopes that the strategic Strait of Hormuz could reopen.

Market Reaction: Brent Crude Drops Below $85

Brent crude, which had been trading around $93 per barrel in overnight markets, fell sharply:

  • Briefly breached the $85 barrier in early morning trade.
  • Stabilised around $87.50, marking a 3% decline for the day.
  • Prices hit their lowest level since the first week of the Iran crisis in early March.

Price Metrics: 3% Daily Decline and Historical Context

Several data points illustrate the depth of the slump:

  • Early‑March prices spiked to $113 per barrel after Iran blocked Gulf shipments.
  • The International Energy Agency (IEA) intervened then, releasing 400 million barrels of emergency crude.
  • Before the crisis, Brent hovered near $70 per barrel.
  • Recent weeks have seen a gradual price erosion due to reduced Chinese imports and “dark transit” stealth exports.

Geopolitical Ripple: Hormuz Reopening and Global Supply Outlook

Analysts link the price dip to renewed optimism about the Strait of Hormuz:

  • Tamas Varga, analyst at PVM Oil Associates, said headlines are restoring market confidence.
  • Tehran confirmed that “large parts of the agreement” are finalised, though a final decision remains pending.
  • European markets mirrored the move, with the pan‑European Stoxx 600 down 1.5%.
  • Goldman Sachs maintains a $90 per barrel average forecast for Q4 2026, but cut its 2027 outlook by $5 to $80 per barrel amid expectations of higher supplies from the Americas and the UAE.

Outlook: Forecasts and Potential Rebound Scenarios

Looking ahead, market participants are weighing two divergent paths:

  • If a definitive US‑Iran agreement materialises and Hormuz reopens, oil flows could normalise by August, providing a “perfect boost” for a lagging stock market, according to Chris Beauchamp of IG.
  • Conversely, lingering uncertainties—such as the exact terms of the deal and the durability of “dark transit” exports—could keep prices volatile.

In short, while the immediate price drop reflects optimism, the longer‑term trajectory will hinge on diplomatic finalisation and the speed at which Gulf shipping resumes.