How the US-Iran Deal Could Affect Oil Prices

The U.S.-Iran deal to reopen the Strait of Hormuz signals a potential stabilization in global oil markets following a 14% supply shock. While Brent crude prices have retreated from their $120 peak to the low $80s, market volatility persists due to lingering geopolitical risks and low inventory levels. Daan Struyven, Co-Head of Global Commodities Research at Goldman Sachs, anticipates Brent averaging $75 per barrel by 2027, noting that while demand has dropped by 5%, most of this loss will likely recover. Despite the optimism surrounding the deal, the outlook remains skewed toward upside price risks, as full, sustained access to the Strait remains uncertain. China’s rapid adaptation—shifting toward coal and electric vehicles—has been a critical factor in preventing triple-digit oil prices, highlighting the resilience of global energy systems in a fragmented geopolitical landscape.