Oil prices crash: Sell-off comes after US–Iran de-escalation, preliminary peace framework

Global oil benchmarks tumbled across the board on Monday evening and into Tuesday (June 16), as markets are treating news about the reopening of the Strait of Hormuz as positive news.

Crude oil rates prices are falling from their crisis highs as traders anticipate a gradual recovery in Gulf exports

WTI crude slid further to $77.85 as of 1.55 GMT on Tuesday (June 16), from $80.75 in early morning trade.

Contracts for Brent crude, the sea-based crude benchmark, dropped further to $80.61 from $83.38.

Murban crude saw the biggest drop, down to $71.78 by 1.55pm GMT, from $76.81 in early morning trade.

Other international benchmarks also fell sharply, with all major one booking multi‑percent losses as traders repositioned away from crisis‑driven premiums.Brent

The broad sell-off comes after reports of a US–Iran de-escalation or preliminary peace framework, including expectations of reduced military confrontation and a possible easing of pressure on maritime flows.

The Strait of Hormuz oil trade chokepoint is no longer effectively closed, and a small but growing number of ships are beginning to cross, prompting traders to rapidly unwound a geopolitical risk premium built up during weeks of conflict in the Middle East.

That shift immediately triggered a repricing of global supply risk.

Updates on the major global crude oil benchmarks:

• WTI & Brent: down ~4–5% (sharp risk-premium unwind)

• Murban & regional Middle East crudes: down ~6–7% (most sensitive to Hormuz risk easing)

• OPEC Basket: down ~6.5% (broad producer basket repricing)

• DME Oman, Indian Basket, Mexican Basket: all down ~5–7% → global spillover decline

• Natural gas: slightly higher (+0.9%) (due to diverging energy market dynamics)

The current price movement shows a pattern, say industry analysts, i.e. the closer the crude benchmark is tied to Middle East flows, the sharper the decline.

Hormuz factor

The Strait of Hormuz is one of the world’s most critical oil chokepoints. It serves as the gateway for Gulf crude exports from Saudi Arabia, Iraq, Kuwait, the United Arab Emirates, and Qatar. Iranian oil from its Kharg Island facility, also flows through Hormuz, when they are not under sanctions or blockades.

Moreover, a large share of global LNG shipments from the Arabian Gulf also flow through this narrow channel.

When the strait was closed or threatened, markets priced in a war premium and a potential loss of millions of barrels per day.

The reopening signaled that those risks had eased, quickly stripping away the crisis premium.