**Crude Oil Prices Plummet Following US-Iran Peace Deal**
On Monday, July WTI crude oil closed at $80.68, down 4.13 (-4.87%), while July RBOB gasoline fell to $2.95, down 0.1026 (-3.36%), marking a two-month low for both commodities. The sell-off was triggered by the announcement that the US and Iran will sign a peace agreement in Switzerland on Friday, effectively reopening the Strait of Hormuz, a crucial shipping route for oil.
Approximately 600 vessels in the Persian Gulf are currently awaiting passage through the strait, which may see increased shipping activity if insurance companies are willing to cover the vessels post-agreement, according to Vortexa. Meanwhile, the U.S. Department of Energy recently adjusted its 2026 crude production estimate to 13.72 million barrels per day (bpd), up from 13.65 million bpd, contributing to a bearish outlook for oil prices.
OPEC’s recent activities also reflect the tightening global oil supply, as their production fell to a 40-year low of 16.33 million bpd. In contrast, U.S. crude oil inventories were reported at 5.3% below seasonal averages. Active U.S. oil rigs increased by 2 to 433, yet remain significantly lower than the December 2022 peak of 627 rigs.
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