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Item 2 of 2 Ships and tankers in the Strait of Hormuz off the coast of Musandam, Oman, April 18, 2026. REUTERS/Stringer/File Photo
[2/2] Ships and tankers in the Strait of Hormuz off the coast of Musandam, Oman, April 18, 2026. REUTERS/Stringer/File Photo Purchase Licensing Rights, opens new tab
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Summary
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Companies
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Details emerge of interim U.S.-Iran peace deal
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IEA sees supply significantly overtaking demand next year
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U.S. crude stocks drop sharply, industry data shows
LONDON/BANGALORE, June 17 (Reuters) - Oil prices steadied on Wednesday, hovering near a three‑month low, as investors weighed the impact of a U.S.-Iran peace deal and the International Energy Agency's warning of a looming supply overhang next year against firmer near-term demand to replenish depleted inventories.
Brent crude futures rose 2 cents to $78.98 a barrel by 0818 GMT and U.S. West Texas Intermediate gained 3 cents to $76.08 a barrel.
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On Tuesday, both had fallen about 5% for a second straight session to hit three-month lows, fuelled by hopes that a U.S.-Iran deal would allow oil to leave the Gulf through the crucial Strait of Hormuz.
IEA SAYS INVENTORIES TO BE RESTOCKED IN NEXT FEW MONTHS
In its first look at 2027, the IEA said the oil market will enter a significant supply overhang, with global supply set to surge by 8 million bpd and demand rising by just 2 million bpd.
In the near term, the agency said the Iran-U.S. deal should provide an opportunity to replenish depleted inventories or build new strategic reserves.
"The current baseline is that the Strait of Hormuz will reopen and that ships will begin transiting through this critical chokepoint in both directions," PVM Oil analyst Tamas Varga said. "The gradual resumption of oil flows, however slow, will materially affect the oil balance," he added.
Details of the interim peace deal began to emerge on Tuesday, with a U.S. official saying it would allow Iran to sell oil upon signing.
The memorandum of understanding, not yet public, extends by another 60 days a tenuous ceasefire agreed in April, to allow room for talks toward a permanent truce.
Still, industry officials say a full return to pre-war production and refining levels is likely to take weeks, months or even years.
Israel has distanced itself from both the April ceasefire and the latest U.S.-Iran pact, fuelling uncertainty about whether it will hold.
Israeli drones attacked three vehicles in southern Lebanon on Tuesday, killing at least four and wounding others, Lebanon's National News Agency said, prompting a rare public rebuke from Trump.
Goldman Sachs said the U.S.-Iran deal had reduced upside tail risks to energy prices, prompting the bank to lower its Brent price forecast to $80 a barrel for the fourth quarter of 2026, from a previous $90.
China's crude oil throughput fell 9.1% in May on the year to its lowest in almost four years, data showed, also signalling that refiners were starting to draw on stockpiles amid the Iran war.
An American Petroleum Institute report showed U.S. crude stocks fell 8.3 million barrels in the week ended June 12, the sources said.
It exceeded expectations for a draw of 4.6 million barrels, with official numbers due from the Energy Information Administration at 10:30 a.m. ET (1430 GMT) on Wednesday.
Additional reporting by Yuka Obayashi in Tokyo and Jeslyn Lerh in Singapore; Editing by Clarence Fernandez and Kevin Liffey
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Thomson Reuters
Anushree Mukherjee is a commodities and energy reporter based in Bangalore, India, covering oil, gas, power, metals and agriculture. Her stories explore the hidden linkages between commodities, geopolitics and industry, tracking how supply-demand shifts in one market ripple across others.
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