Oil benchmarks stabilize after a 5% drop as investors weigh potential Iranian supply increases under a new US agreement.
Brent crude futures rose $0.02 to $78.98 per barrel, while US WTI crude gained $0.03 to $76.08, both near three-month lows. The moves follow a 5% decline in the previous session amid speculation that a US-Iran peace deal could ease sanctions and boost Iranian oil exports through the Strait of Hormuz.
The agreement, outlined in a memorandum of understanding, extends an April ceasefire by 60 days to support broader truce negotiations. A US official indicated Washington would permit Iran to resume oil sales upon signing, though Israel has not endorsed the deal, raising concerns over its longevity. Analysts warn that restoring Iran’s pre-war production levels may take time.
The International Energy Agency’s latest outlook projects an eight million barrel per day supply surplus by 2027, with demand growth lagging at just two million barrels per day. Short-term market reactions remain cautious as traders assess the deal’s durability and supply implications.