Oil prices extended losses on Thursday pressured by a now-signed US-Iran peace deal that includes the reopening of the Strait of Hormuz and the easing of US sanctions on Iran.
Front-month West Texas Intermediate crude futures fell 2.9% to $74.57 per barrel, while Brent futures fell 1.9% to $78.04/bbl.
"Oil prices extend declines as the US and Iran sign a peace agreement, with Middle East supply expected to recover sooner than previously anticipated," ING analysts said.
According to a Bloomberg report, the signed memorandum of understanding immediately waives US sanctions on Iranian crude exports. It also establishes a 60-day negotiation framework intended to formally resolve broader nuclear issues.
However, experts remain skeptical about a swift recovery in maritime trade.
Kpler said that reopening the waterway does not guarantee an immediate normalization of trade flows, noting that confidence among shippers remains fragile while freight costs and insurance dominate commercial discussions.
On the supply side, data from the US Energy Information Administration noted that commercial crude stockpiles dropped by 8.3 million barrels to 418.2 million barrels for the week ended June 12.
Average prices for regular gasoline in the US dropped to their lowest level since March at just below $4 per gallon on Thursday, according to the American Automobile Association.
Data from the AAA gasoline prices website showed that the national average slipped to $3.999/gal, with Indiana having the cheapest price at $3.399/gal.
On the geopolitical front, a major Ukrainian drone attack on Russia including the capital Moscow, has caused a blaze at the Gazprom Neft-owned Kapotnya oil refinery which supplies fuel stations in the capital, according to media reports on Thursday.