Oil prices have hit a three-month low as a US-Iran deal to reopen the Strait of Hormuz is expected to unleash a wave of supply.
West Texas Intermediate traded below $77 a barrel, after sinking 16% over four sessions to post the longest losing run this year.
The interim pact, due to be signed on Friday, offers Tehran broad financial incentives, including the right to sell its oil immediately.
Crude prices have retreated sharply in recent weeks as moves to end the war between Washington and Tehran are seen easing tightness in global energy markets.
Producers, shippers and traders are now assessing whether the agreement will prove to be durable, and how long it will take for vessel transits of the Hormuz chokepoint to be revived in earnest.
While some traders believe US naval operations will slow the flow of traffic, the futures market is increasingly optimistic about a revival in oil supply.
The 14-point draft memorandum offers the clearest picture yet of the deal, which will pave the way for 60 days of talks aimed at formally ending the war and imposing strict new limits on Iran's nuclear program.
The deal includes a requirement for Tehran to ensure the movement of merchant ships and for the US to lift its own blockade of Hormuz.
Crude stockpiles have still been drawing at a rapid pace, with a US industry group estimating that US inventories sank by 8.3 million barrels last week.
