Iran Conflict Fuels Oil Uncertainty
Oil Prices Climb Amid Uncertainty Over Iran War's End and Hormuz Reopening
Oil prices steadied on Wednesday after two days of sharp losses, as investors waited to see if a landmark U.S.-Iran peace deal would actually stick. Brent crude futures climbed 47 cents, or 0.6%, to $79.43 a barrel, while U.S. West Texas Intermediate rose to $76.53 a barrel, according to Reuters.
Both benchmarks had slumped to three-month lows after President Trump announced a Memorandum of Understanding on Sunday, June 14, promising a "toll-free" reopening of the Strait of Hormuz. But traders are not convinced the deal will hold — and for good reason.
The June 14 Deal That Shook Oil Markets
Trump announced the breakthrough on Sunday via Truth Social, writing: "Ships of the World, start your engines. Let the oil flow!" The deal followed 14 hours of talks brokered by Qatar, according to Yahoo Finance. Iran's Deputy Foreign Minister Kazem Gharibabadi confirmed the agreement on state television but stressed that nothing takes effect until a formal signing in Geneva on Friday, June 19.
The deal would lift the U.S. naval blockade on Iranian ports — in place since April 13 — and reopen the Strait of Hormuz to global shipping. The Strait carries roughly 20% of the world's oil. Over 800 vessels, including 426 tankers, are currently stranded in and around the Persian Gulf, according to MarketScreener.
Israel Rejects the Deal, Threatening the Whole Accord
The biggest obstacle to the deal is Israel. Prime Minister Benjamin Netanyahu said, "The struggle is not over. We will continue to be vigilant... to defend ourselves." Israel is not signing the Geneva accord and is keeping up operations against Hezbollah in Lebanon, according to Reuters.
Iran's Foreign Minister Seyed Abbas Araghchi has warned that any further Israeli strikes in Lebanon would count as a violation of the MoU. That puts the Strait back at risk. A similar April 17 ceasefire collapsed after just two weeks for exactly the same reason — Israel refused to halt its Lebanon campaign, according to Yahoo Finance.
Markets Are Skeptical — Logistical Chaos Could Last Months
Even if the deal holds, oil supply will take time to recover. Energy analysts warn that clearing the "logistical backlog" — including removing sea mines from the Strait — could take months before physical oil flows return to normal. The U.S. Energy Information Administration projects gasoline prices will stay elevated through 2026, according to Yahoo Finance.
Iran lost an estimated $500 million per day in oil revenue during the U.S. blockade. As part of the full peace agreement, a $300 billion reconstruction fund for Iran has been proposed, according to Reuters. The deal also opens a 60-day window for talks on Iran's stockpile of highly enriched uranium — a key sticking point that remains unresolved.
How a Three-Month War Brought Oil to a Crisis Point
The conflict began on February 28, 2026, when the U.S. and Israel launched strikes on Iranian targets. Iran responded by closing the Strait of Hormuz and hitting regional energy infrastructure. The U.S. then imposed a formal naval blockade on April 13, creating what analysts called a "double blockade" — Iran shut the world out of the Strait, and the U.S. shut Iran out of global oil markets, according to MarketScreener.
A brief ceasefire in April fell apart. Then on June 7, Iran fired a fresh wave of missiles at Israel, and Israel struck petrochemical plants in Bandar-e Mahshar. The Geneva signing on Friday is now the last, best chance to end the crisis — but with Israel outside the deal, markets are right to stay cautious, according to Yahoo Finance.
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