Global crude oil prices fell sharply on Monday after the United States, Israel and Iran reached an agreement to end the Middle East conflict and reopen the critical Strait of Hormuz shipping route.
Brent crude, the international oil benchmark, declined by five per cent to $82.90 per barrel. This marks the first time oil has traded within this range since March.
Meanwhile, US West Texas Intermediate (WTI) crude dropped four per cent to $80 per barrel.
Oil Prices Retreat After Months of Volatility
The decline follows months of market turbulence triggered by escalating geopolitical tensions in the Middle East.
When the conflict began in February, Brent crude climbed from $62 per barrel on February 16 to $79 per barrel by March 2.
During the peak of the war in April, oil prices surged to as high as $125 per barrel before retreating following the latest diplomatic breakthrough.
Deal Includes Reopening Strait of Hormuz
According to reports, the United States and Pakistan announced that an agreement to reopen the Strait of Hormuz is expected to be signed in Switzerland on Friday.
The deal is being viewed as a major step toward ending months of conflict that have claimed thousands of lives and disrupted global energy markets.
US President Donald Trump announced the development on social media.
“The Deal with the Islamic Republic of Iran is now complete.”
He added:
“Ships of the World, start your engines. Let the oil flow!”
The Strait of Hormuz remains one of the world’s most important energy corridors, serving as a major transit route for global oil supplies.
Iran Confirms Immediate End to Hostilities
Iran also signalled support for the agreement.
Kazem Gharibabadi said the arrangement would bring an immediate end to the conflict and pave the way for future negotiations.
“Immediate end” to the countries’ war.
He added that both sides would hold talks within two months to pursue a “final agreement”.
Energy Markets React Positively
The sharp decline in oil prices reflects growing optimism among investors that the agreement could stabilise global energy markets and ease supply concerns.
The reopening of the Strait of Hormuz is particularly significant because disruptions in the waterway have historically triggered major spikes in global oil prices.
Markets will now closely monitor the signing of the agreement in Switzerland and upcoming diplomatic talks to determine whether the peace efforts lead to long-term stability.
Author
