WTI and Brent crude slumped to three-month lows after the U.S. and Iran agreed to a 60-day ceasefire framework, easing supply-disruption fears. The deal removes a key geopolitical risk premium from oil, but the durability of the truce and Iran's actual export ramp-up pace will determine how much further prices can fall.
If the ceasefire collapses before a final deal is signed — a historically common outcome in U.S.-Iran negotiations — the full geopolitical risk premium snaps back into crude, driving a sharp reversal that squeezes any short position in USO or E&Ps.
A durable ceasefire framework, combined with Iranian export normalization and no OPEC+ offset, removes a structural floor from crude prices and sustains downward pressure on USO well beyond the initial knee-jerk sell-off.