Oil Prices Plunge Over 10% in Two Days on Middle East De-escalation, Hormuz Reopening Prospects

International oil prices fell for a second consecutive day on Tuesday, June 16, 2026, dropping over 5% and reaching nearly 3-month lows. The decline was driven by easing tensions in the Middle East and the potential reopening of the Strait of Hormuz, following reports of a proposed interim agreement between the United States and Iran. Brent crude futures closed down 5.1% at $78.96 per barrel, while West Texas Intermediate (WTI) futures dropped 5.8% to $76.05 per barrel. This marks the lowest closing price for Brent since March 2, 2026, and for WTI since March 4, 2026. The proposed deal, which U.S. officials indicate would allow Iran to resume oil exports and reopen the critical shipping lane, is rapidly diminishing the geopolitical risk premium that had previously boosted prices since the US-Iran conflict began on February 28, 2026. Wall Street banks, including Goldman Sachs, Morgan Stanley, and Citi, have consequently lowered their oil price forecasts amid reduced supply risks and a weakening global economic outlook.