Brent Crude Falls Below $80 Amid Hormuz Strait Tensions and G7 Concerns

Global benchmark Brent crude oil prices fell below $80 per barrel, reaching a three-month low, driven by optimism surrounding a provisional agreement between the United States and Iran to reopen the Strait of Hormuz. In early trading, the barrel price dropped to as low as $78.66, marking its lowest level since early March. This decline reflected expectations of de-escalation in ongoing tensions between Washington and Tehran, and a potential increase in global oil supply.

Iranian state media announced that Iranian oil tankers and other vessels have resumed shipping operations following a deal with Washington. This development was interpreted as a lifting of the naval blockade that had been in place since April 13. However, despite this positive news, the ongoing G7 summit in Évian-les-Bains revealed difficulties among European allies and other partners in formulating a common position on Iran. US officials indicated that a significant increase in shipping traffic in the Strait of Hormuz could take up to two weeks, with a return to pre-February levels potentially taking even longer.

Crucially, mines still need to be cleared from the Strait, and shippers exhibit varying risk tolerances regarding navigation through Hormuz. Maritime security sources estimate that mine-clearing operations could take 40 to 50 days, with insurance companies and shipping operators requiring more assurances before deeming the route sufficiently safe. These uncertainties have capped Brent crude's downward movement below $80, preventing further immediate declines. Market experts maintain a cautious stance until the full details of the agreement are clarified and complete security is established in the Strait.

These developments unfold against the backdrop of a regional conflict that escalated in February 2026, following US and Israeli attacks on Iran, dubbed 'Operation Epic Fury.' These strikes targeted Iranian military assets and leadership, leading to retaliatory actions by Iran and a broader regional war. During this period, the Strait of Hormuz was effectively blocked by Iran, causing a global energy shock. Following a conditional ceasefire declared on April 8, a final peace agreement between the parties is anticipated.

Market analysts project that a full reopening of the Strait of Hormuz and the restoration of normal oil flows will take time. Goldman Sachs has revised its Brent crude price forecast for Q4 2026 from $90 to $80 and for 2027 from $80 to $75, assuming Persian Gulf exports will return to pre-war levels by the end of July. However, analysts emphasize that the implementation details of the agreement and regional security risks remain uncertain. Full normalization hinges on factors such as mine clearance, improved insurance conditions, and the re-establishment of trust among shipping companies.