🛢️ Global Oil Prices Drop as US-Iran Tensions Ease; OPEC Cuts 2026 Demand Forecast

• Market Reaction: Brent futures fell 2% (down US$ 1.83) to US$ 88.55 a barrel, while WTI crude dropped 1.8% (down US$ 1.60) to US$ 86.11. The decline extends previous losses after US President Donald Trump cancelled planned military strikes on Iran, softening fears of immediate escalation. • Geopolitical Context: A potential peace deal to reopen the Strait of Hormuz—which carries 20% of global oil and liquefied natural gas shipments—could be signed as early as this weekend, though Iran has not yet approved the text. Analysts note the situation remains fragile, warning that if oil flows do not resume by late July, seasonal demand could push prices toward US$ 120-130 per barrel. • Global Demand Forecast: OPEC lowered its 2026 world oil demand growth forecast for the second consecutive time, cutting it to 970,000 barrels per day (bpd) from 1.17 million bpd. However, it raised its 2027 demand growth forecast by 190,000 bpd to 1.73 million bpd, anticipating a later consumption rebound. • Implications for Sri Lanka: While not explicitly mentioned in the raw data, a downward correction in global oil prices typically eases import bill pressures on Sri Lanka's energy sector and reduces manufacturing costs for key export industries like apparel & textiles.