Oil Prices Crash as US and Iran Agree to Reopen Strait of Hormuz
By Aboki Forex —
Oil prices took a sharp dive on Monday after the United States and Iran reached an interim deal to end their months-long conflict. The agreement could reopen the Strait of Hormuz and ease the supply crunch that has shaken global energy markets.
Brent crude fell more than 4% to below $84 a barrel. It closed last week at a three-month low. West Texas Intermediate was trading near $81.
President Donald Trump announced on social media that he was authorising the “toll free opening” of the Strait of Hormuz. He also said the blockade on Iran would end. The strait is expected to reopen on Friday when the deal is signed.
Trump cheered the move, saying “let the oil flow!” But traders and analysts are more cautious. They point to a lack of fine print in the agreement. There are also hurdles for the shipping industry to restart transits of the waterway. And it will take time for oil fields to restart pumping.
Iran’s Deputy Foreign Minister Kazem Gharibabadi confirmed a deal was reached. He said the full text will only be published after the signing ceremony in Switzerland. US Vice President JD Vance said he “certainly” plans to attend. Trump may also go.
The war began in late February when the US and Israel attacked Iran over its nuclear programme. Iran responded by striking targets across the Persian Gulf and shutting the Strait of Hormuz. Before the conflict, the strait carried about a fifth of global oil flows. US forces then imposed their own blockade.