Oil prices are falling on global markets: key factors
12 June 11:18
Oil prices fell on Friday, June 12, by more than 2% after U.S. President Donald Trump once again decided not to strike Iran’s infrastructure and assured that Washington had agreed with Tehran on the terms for ending the war. This was reported by "Komersant Ukrainian" citing Reuters.
Brent crude futures fell 2.11% to $88.47 per barrel, while contracts for the North American WTI blend dropped 2% to $85.96 per barrel.
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Trump told reporters on Thursday that a peace agreement that would allow the Strait of Hormuz to be opened could be signed as early as this weekend. However, according to news agencies, a representative of the Iranian Foreign Ministry said that Tehran has not yet given its final approval to the agreement.
“Of course, hope can be deceiving again, but the market reacted to the news quickly and decisively,” said Tony Sycamore of IG.
He added that although prices are currently correcting lower, as long as they remain above the $80–$83 support zone, the risks will be heavily skewed to the upside.
On Thursday, Iran announced that it was closing the Strait of Hormuz. State media reported on Friday that the IRGC did not allow a tanker to pass through it without Tehran’s permission. Meanwhile, U.S. command reported on social media that commercial vessels continue to successfully navigate this route.
“We can cautiously assume that the continuation of the ceasefire (in the Persian Gulf) is a done deal. Even if this is the case, it could easily fall apart if negotiations on the nuclear program are not successful,” ING analysts believe.
“A turning point for the market could come at the end of July if oil shipments do not resume by then: in that case, declining inventories and stronger seasonal demand will push prices to $120–$130 per barrel.”
Meanwhile, OPEC lowered its estimate on Thursday for global oil demand growth in 2026 by 200,000 barrels per day compared to its May forecast, expecting it to increase by 970,000 barrels per day year-over-year.
The cartel expects demand to grow by 1.73 million barrels per day in 2027 to 107.86 million barrels per day.
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