RoydadNaft –  Brent crude futures dropped $1.02, or 1.28%, to settle at $78.53 per barrel. U.S. West Texas Intermediate (WTI) crude futures declined $1.48, or 1.93%, to $75.31 per barrel.

Oil prices fell more than 1% on Thursday, hitting their lowest levels since the first trading day of the Iran conflict, as a temporary U.S.-Iran agreement to end hostilities, reopen the Strait of Hormuz, and ease sanctions on Tehran boosted expectations for a swift recovery in global supply.

Brent crude futures fell $1.02, or 1.28%, to $78.53 a barrel at 10:36 GMT, while WTI crude dropped $1.48, or 1.93%, to $75.31 per barrel.

Brent reached its lowest level since March 2 — the first trading day after initial U.S. and Israeli strikes on Iran — while WTI hit its lowest since March 4.

“This broad sell-off continues as energy markets rapidly price in a faster-than-expected return of Iranian barrels following the recent U.S.-Iran understanding,” IG market analyst Tony Sycamore wrote in a note.

The 14-point agreement launches a 60-day negotiation period during which Iran will allow unimpeded passage through the Strait of Hormuz. The deal calls for restoring traffic through the strait to full capacity within 30 days.

The preliminary pact defers many of the more difficult issues, such as Iran’s nuclear program, and calls on the United States and its partners to provide a $300 billion financing package for Iran’s reconstruction.

Analysts expect flows through the Strait of Hormuz to improve gradually, though industry experts have cautioned that prices may not collapse sharply amid recovering demand and restocking.

Goldman Sachs expects Gulf exports to return to pre-war levels by the end of July, with crude production recovering by October.

The bank estimates that normalizing exports to pre-war levels could involve a 1.3 million barrels per day increase in Hormuz flows from current levels, reaching about 70% of pre-war volumes.

BNP Paribas is not forecasting a return to pre-war prices and sees $75 per barrel as a “durable floor for the foreseeable future,” citing ongoing supply disruptions and stronger demand. Brent traded in the $60–70 range in the first two months of the year before the Iran conflict.

China, the world’s second-largest oil consumer, is projected to consume about 753 million metric tons in 2026 — 4.9% less than in 2025 — due to its shift toward renewables and high oil prices, according to a report by PetroChina’s research unit.

Meanwhile, Ukrainian drones struck a refinery in Russia’s capital for the second time this week, with Kyiv describing the attacks as evidence of its growing capabilities.