Brent: Barrel Drops Below $83 After US-Iran Hormuz Agreement

A Sharp Decline in Brent Crude Welcomed by the Markets

Brent crude has fallen back to around $82.97 at the beginning of the session, experiencing a significant drop. This movement follows directly after the announcement of a US-Iran preliminary agreement extending the ceasefire by 60 days and planning the gradual reopening of the Strait of Hormuz, through which about one-fifth of the world's oil and liquefied natural gas typically passes.

The formal signing of the memorandum of understanding is expected at the end of the week in Geneva, following mediation led by Pakistan, and comes with the parallel opening of nuclear negotiations. The US president confirmed the lifting of the American naval blockade on Iranian ports, temporarily ending more than three months of conflict that had removed millions of barrels from the global supply.

This easing movement spread to other asset classes: Asian stock indices saw significant gains while the dollar depreciated against major currencies. This reversal extends the trend initiated the previous week, already described during the first drop of Brent below $88, but with a more pronounced cumulative impact.

A Gradual Return to Normalcy in Flows

At this stage, the agreement remains a political framework and a memorandum of principle. Energy sector analysts note that the normalization of oil and gas flows through the Strait of Hormuz could take several months, due to the time required for the demining of maritime corridors, reactivation of specific insurance coverages for conflict zones, and restarting of loading capacities.

As long as these operational conditions are not met, the geopolitical risk premium embedded in energy values, maritime transport, and insurance companies will not disappear instantly. Brent crude, despite its decline, remains above the levels observed at the beginning of the year, indicating that the market continues to factor in a residual risk.

Volatility is also expected to remain high for stocks exposed to hydrocarbons and Gulf logistics chains, which are sensitive to every official statement from stakeholders and reports from the Pakistani mediation.

World Bank: An Energy Shock Still Impacting 2026

In its Global Economic Prospects report published on June 11, the World Bank revised down its forecast for global growth in 2026, expected at 2.5% compared to 2.9% in 2025, marking the lowest level since the Covid-19 pandemic. The institution attributes this decline to the Middle Eastern energy shock and uncertainty related to the conflict.

At the same time, global inflation is projected at 4.0% in 2026, up from 3.3% in 2025, due to the anticipated increase in energy and fertilizer prices, which complicates the central banks' disinflation path. A risk scenario, in case of more severe energy disruptions, would bring global growth down to 1.3% and increase inflation to 4.4%, nearly resulting in stagnation. To mitigate these pressures, the institution announces a crisis financing capacity of up to 80 to 100 billion dollars over 15 months, with 50 to 60 billion immediately available for the most exposed emerging countries.

The region consisting of the Middle East, North Africa, Afghanistan, and Pakistan, directly affected by the conflict, is expected to grow by only 1.6% in 2026 before a projected rebound of around 5.0% in 2027, driven by reconstruction and the restoration of energy exchanges. These projections should be read as a central scenario accompanied by a risk scenario, and not as a definite forecast, as assumptions about energy prices and monetary policy can evolve rapidly.