US-Iran Sign Hormuz MoU, But Crude Oil Prices Will Stay High for Months

Key Takeaways

1. The USA & Iran agreed in a MoU signed on June 14, 2026, to unblock the Strait of Hormuz in 30 days. Brent crude lost value in June, 15th down to $83/barrel compared to the high of over $110/barrel reached in May 2026.
    
2. The Strait was clogged starting in March 2026, and the world’s oil market suffered losses of more than 1 billion barrels in this period. The deal will be signed officially on June 19, 2026, in Switzerland.

Why is Crude Still at $83 after a Peace Deal?

The MoU was signed. Prices fell. But $83 a barrel is not a relief rally. It is still $23 above where Brent sat before the war began in February 2026. Trump declared Hormuz open to toll-free passage and authorised the US Navy to lift its blockade on Iranian ports on June 14. 

A senior Iranian official cited by Reuters confirmed the draft MoU includes the immediate reopening of the strait. It also includes a US sanctions waiver on Iranian oil for a set period and the release of $25 billion in frozen Iranian assets.

Markets responded. Brent fell 4.7% to $83 a barrel on June 15, 2026. WTI dropped 5.1% to $80.53, the lowest since March 10. Still, $83 oil is not cheap oil. In the June 2026 Short-Term Energy Outlook of the EIA, the projected Brent price for the year 2026 rose significantly to $79 per barrel from $58 per barrel in February. The deal has priced out the war. What damage did the war leave behind? That is still very much priced in.

What does this mean for Indian Households paying more at the Pump?

India gets hit hard when Hormuz chokes. The country imports nearly 90% of its crude and depends heavily on Gulf suppliers for LPG and LNG. By the third month of the crisis, fuel-category inflation climbed to 30.33%, up from 24.71% the previous month.

State-run OMCs were bleeding ₹30,000 crore per month in underrecoveries while crude stayed above $100 a barrel. They kept their prices as long as possible. Prices of petrol and diesel increased by ₹3 per litre in May 2026, and this marked the first increase in four years. As it stands now, however, OMCs continue losing close to ₹650 crore per day owing to low prices at the pump. Things are about to get better, but certainly not this month.

Experts warn that we won’t see “normal” oil prices again before 2027. 

Saudi Aramco CEO Amin Nasser didn’t sugarcoat it on May 10, 2026. “If trade flows be able to resume today or right away through the Strait of Hormuz, it will take a few months for the oil market to normalise. But if trade and shipping remain curtailed by more than a few weeks from today, we anticipate the supply disruption to persist, and the market to normalize only in 2027,” he said in emailed comments to investors on Aramco’s Q1 2026 results call.

Bob Parker of the International Capital Markets Association was equally blunt. “Oil prices will likely remain between $90 and $100 at least for the next couple of months,” he told CNBC’s Squawk Box Europe, adding that “even if the Strait opens, the opening will only be partial.”

Nasser added, “Reopening routes is not the same as normalizing a market that has been deprived of about 1 billion barrels of oil.” Infrastructure across the Gulf took serious damage. Tanker fleets are scattered. Shipping insurance costs remain elevated.

Conclusion

June 14 was a step forward. But cheap oil is not coming back this month. Gulf infrastructure is damaged, tanker routes are scattered, and the EIA still has Brent at $79 for 2026. Indian households will feel this for a while yet.

FAQs

The US-Iran deal is signed. So why are oil prices still stuck above $80?

The deal ended the war, not the damage. Oil production was down by over 1 billion barrels because of the shutdown of the Hormuz Straits. The tankers are not operating, Gulf refineries have suffered damage, and war insurance rates for shipping are being charged. Prices need months to reflect a real recovery.

Iran says it won’t charge tolls on Hormuz but will charge “fees.” What is the difference, and does it change anything for oil prices?

Not much, practically. A toll and a fee both raise the cost of moving oil through the strait. The shipping companies will pass that cost on. It adds a floor to crude prices and slows the pace at which Brent can fall back toward pre-war levels.