Oil drops to fresh three-month low as markets weigh US-Iran peace deal

By Stephanie Kelly and Anushree Mukherjee

June 16 (Reuters) - Oil prices slid to caller three-month lows connected Tuesday arsenic markets weighed prospects for a resumption of supplies done the Strait of Hormuz alongside weaker ‌physical request and scant details connected a preliminary woody to extremity the Iran war.

Brent crude futures were ‌down $1.44, oregon 1.7%, astatine $81.73 a barrel, the lowest since March 10, astatine 0906 GMT.

U.S. West Texas Intermediate was down $1.55, oregon 1.9%, astatine $79.20 a barrel, besides ​the lowest since March 10.

Oil prices had already dropped astir 5% connected Monday to their lowest adjacent since March 4 aft U.S. President Donald Trump said a memorandum of knowing had been signed to extremity the U.S.-Israeli warfare with Iran, though afloat details person not been released.

Iranian Foreign Minister Abbas Araqchi said connected Tuesday Iran and the U.S. would commencement a caller ‌round of talks successful Switzerland connected Friday ⁠to scope a last statement aft the commencement of an interim deal.

He warned that immoderate Israeli onslaught connected Lebanon oregon continued beingness connected Lebanese territory would breach the interim agreement.

INVESTORS EYE ⁠STRAIT REOPENING

The struggle led to the closure of the Strait of Hormuz, which typically carries astir one-fifth of planetary lipid supplies.

Some analysts expect flows done the strait to resume soon, adding to downward unit from already brushed carnal markets.

Goldman Sachs lowered its ​fourth-quarter Brent ​forecast to $80 a tube from $90 and chopped its 2027 mean ​estimate to $75 from $80, saying it present assumes Gulf ‌exports instrumentality to pre-war levels by the extremity of July alternatively than precocious August.

A scope of indicators has pointed to weakening carnal lipid markets successful caller weeks, Morgan Stanley analysts said successful a lawsuit note.

China's crude imports slumped 29% successful May to their lowest successful 8 years, extending a crisp diminution for the world's largest importer, with shipments of Saudi crude besides expected to autumn successful July.

Early indications suggest the U.S.-Iran woody would reopen the blockaded Strait of Hormuz ‌and widen a ceasefire for 60 days, buying clip for negotiations ​on issues including Iran's atomic programme.

But with details inactive unclear and a ​permanent truce yet to beryllium secured, analysts accidental ​volatility risks remain.

Suvro Sarkar, the caput of DBS Bank's vigor research, said the deal's archetypal signifier - ‌encompassing the Geneva signing of the ceasefire hold - ​was easy.

The 2nd signifier - the ​reopening of the Strait of Hormuz and winding down the U.S. naval blockade connected Iranian ports and vessels - would beryllium watched intimately by markets, helium added.