Global oil prices declined on Thursday after the United States and Iran signed an agreement aimed at easing tensions in the Middle East. The decline also followed a warning from the International Energy Agency (IEA), which expects global oil supplies to increase significantly next year.
By midday trading, Brent crude fell by 1.13% to $78.65 per barrel. U.S. West Texas Intermediate (WTI) crude also dropped by 1.26% and traded at $75.82 per barrel.
Investors reacted positively to the temporary reduction in geopolitical tensions. Many traders believe lower conflict risks could stabilize energy markets and improve the global supply outlook.
However, uncertainty still surrounds the agreement. U.S. President Donald Trump warned that military action could resume if Iran fails to honor its commitments. Speaking to reporters, Trump said the United States would launch severe attacks if Iran violated the deal. He added that he preferred a peaceful solution and hoped Tehran would respect the agreement.
At the same time, the International Energy Agency expects a permanent settlement in the Middle East to increase global oil supplies. The agency believes higher production could create a large surplus in international markets next year.
According to the IEA’s latest report, global oil supply will average 102.4 million barrels per day in 2026. The agency also forecasts a sharp rise in production capacity. It expects global supply to reach 110.3 million barrels per day next year.
Analysts say expectations of higher production and lower geopolitical risks have pressured crude prices. Investors now closely monitor developments in the Middle East and future production decisions by major oil producers.
The recent decline in oil prices highlights how political events and supply forecasts can quickly influence energy markets. A lasting agreement between Washington and Tehran could reshape global oil trade and increase supplies.
In contrast, a collapse of the deal could reverse the current trend and trigger fresh price volatility across international markets.
