Oil prices fall as U.S.-Iran deal drains Hormuz risk premium

Crude declined for a second day on June 18 after the U.S. and Iran signed a peace agreement, with traders unwinding bets on Strait of Hormuz closure. The Strait carries roughly one-fifth of global oil supply. When geopolitical tail risks are priced into futures and then visibly de-escalate, longs unwind quickly—a mechanical repricing with no physical supply shock. The durability of the accord remains uncertain given historical fragility of U.S.-Iran agreements and Congressional skepticism on sanctions relief.