Oil falls below US$80 as US-Iran deal raises hopes of increased supply

KINGSTON, Jamaica — Global oil prices fell below US$80 a barrel on Tuesday as anexpected agreement between the United States (US) and Iran raised hopes that more crude could return to the market and ease pressure on fuel-importing countries such as Jamaica.

Brent crude, the international benchmark used to price much of the oil traded worldwide, fell to its lowest level in about three months. US West Texas Intermediate crude also declined as traders assessed the prospects for increased shipments from the Middle East.

The decline followed progress towards a preliminary US-Iran agreement that could lead to the restoration of oil flows through the Strait of Hormuz, one of the world’s most important energy-shipping routes. Roughly one-fifth of global oil shipments normally pass through the strait.

Oil prices have now fallen for four consecutive trading sessions, reversing part of the sharp increase caused by the conflict and disruption to tanker traffic.

For Jamaica, which imports nearly all the petroleum it consumes, a sustained decline in international crude and refined-product prices could eventually reduce the country’s fuel-import bill and ease some pressure on petrol, transportation, electricity and inflation.

However, the effect would not necessarily be immediate. Local fuel prices are also influenced by the cost of refined petroleum products, freight, taxes and movements in the Jamaican dollar.

Uncertainty also remains over how quickly normal shipments can resume. Tanker traffic has not yet returned fully to pre-conflict levels, while mine-clearing, security arrangements and further negotiations between Washington and Tehran could affect the pace at which supplies recover.

Analysts have also warned that depleted inventories and stronger seasonal demand could limit further price declines, even if the proposed agreement is completed.

Major investment banks have nevertheless lowered some of their oil-price forecasts. Goldman Sachs reduced its Brent forecast for the fourth quarter of 2026 to US$80 a barrel from US$90, while Morgan Stanley expects production to recover more gradually.

The market will now watch whether the preliminary agreement is signed, whether the Strait of Hormuz fully reopens and how quickly suspended oil production and exports return.