The Middle East crude market has weakened sharply this week, slipping into discounts, Reuters data showed, after the US and Iran agreed a framework deal to reopen the crucial Strait of Hormuz, brightening the global supply outlook, according to Reuters.

With Asian refining demand led by China still subdued after months of run cuts, hopes of higher supply after the deal pushed Dubai and other Middle East benchmarks into contango and opened rare arbitrage opportunities to Europe and the United States.

Benchmark Dubai’s premium to swaps slipped into a discount of 46 cents on Tuesday, the first contango structure since January, Reuters’ data showed, after hitting pre-war levels of $2.06 per barrel on Monday.

Similarly, spot Oman, Murban differentials flipped into discounts of 67 and 49 cents, respectively on Tuesday.