Crude oil prices have dropped to within striking distance of pre-conflict levels following the signing of a 60-day interim agreement between the United States and Iran, according to Ship & Bunker. The deal, signed on Wednesday after a Friday signing ceremony in Switzerland was abandoned, has prompted a swift market response — though analysts warn the situation remains volatile.
Prices Fall, But Fragility Remains
As of mid-afternoon GMT on Thursday, June 18, Brent crude was trading at $77.69 per barrel, down $1.85 on the day, while West Texas Intermediate fell $1.89 to $74.90 per barrel, Ship & Bunker reports. Separately, the AAA noted that average U.S. gasoline prices dipped below $4 per gallon for the first time in over two months.
Despite the price retreat, David Fyfe, chief economist at Argus Media, cautioned that markets are far from settled. Speaking to media, Fyfe pointed to the uncertain pace of supply recovery across the Middle East and continued rapid crude drawdowns as key sources of instability during the 60-day negotiation window.
“An awful lot of questions about just how quickly supply can be returned to the market remain,” Fyfe said, adding: “It wouldn’t take much for prices to spike again.”
The Terms of the Pact
Under the interim agreement, U.S. military forces have lifted their blockade on maritime traffic entering and exiting Iranian ports and coastal areas near the Strait of Hormuz, though vessels are reported to remain in the general vicinity to monitor compliance, according to Ship & Bunker.
The deal has drawn significant political criticism. President Donald Trump pushed back against claims that the U.S. had agreed to $300 billion in payments to Iran, calling the reports “fake news” on Truth Social. Vice President J.D. Vance added that Iran would only receive benefits “if they fully comply and change their behaviour” — a condition some critics argue Iran is unlikely to meet, raising questions about whether conflict could resume.
A More Optimistic Read
Not all analysts share the bearish view. Phil Flynn, senior market analyst at Price Futures Group Inc., told Ship & Bunker that the potential reopening of the Strait of Hormuz removes a substantial risk premium that had been embedded in crude prices following disruption to roughly 20% of global oil flows.
“While some say full normalization may take weeks — insurance, repairs, sanctions relief — the direction is clear,” Flynn said, noting that “the more pessimistic timeline has been proven to be too pessimistic.”
Does This Matter to You?
Developments in the Strait of Hormuz carry direct implications across the maritime and shipping spectrum. The Strait is one of the world’s most critical chokepoints for seaborne oil and energy trade, and any shift in its operational status — whether a blockade, reopening, or uncertain compliance period — affects routing decisions, insurance pricing, cargo scheduling, and bunker fuel demand patterns. The 60-day interim window introduces a sustained period of uncertainty that market participants will need to navigate carefully.
As Fyfe noted, supply recovery timelines remain unclear, and price spikes cannot be ruled out during this period. The situation warrants close monitoring.
Gulf Bunkering does not provide operational or security guidance. This article is for informational purposes only. Operators should consult flag state authorities, P&I clubs, and relevant advisories for decisions relating to transit planning.
Sources: Ship & Bunker
