The S&P 500 (SPX) is showing muted price action on Thursday as optimism over a U.S.-Iran peace deal has sent Brent crude (BZ), the international benchmark for oil, below $100 per barrel for the first time since late April.
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Trade QQQ with leverageThe U.S. has drafted a 14-page memorandum of understanding that calls for Iran to reduce pressure on the Strait of Hormuz, which is responsible for roughly 20% of global oil flows. That could ease a global supply shock and send oil prices even lower.
Return to Pre-War Oil Prices Could Take Months
Iranian officials have not yet issued a formal response to the proposal, though one is expected soon. If Tehran accepts, a 30-day negotiation window will open, paving the way for a complete reopening of Hormuz and restrictions on Iran’s nuclear program.
Despite the fall, Brent is still up by 33% since the war began on February 28. A return to pre-war prices could take several months due to damaged energy infrastructure in the Middle East and the time needed to fully restore supply flows.