Oil princes sink to lowest level since March after US-Iran peace deal announcement

Oil prices fell sharply on Monday after the United States and Iran announced an agreement aimed at reopening the Strait of Hormuz and ending the US blockade of Iranian ports.

Brent crude dropped 5 per cent to $82.91 a barrel, while US crude fell 5.5 per cent to $80.21, both reaching their lowest levels since early March.

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Markets reacted positively after US President Donald Trump said a deal with Iran “is now complete”. The agreement is expected to reopen the Strait of Hormuz, a key shipping route for global oil and gas supplies.

Despite the decline, oil prices remain significantly higher than before the conflict between the US, Israel and Iran escalated earlier this year.

“Sentiment has clearly improved… but sentiment is not the same as supply,” Rystad Energy chief economist Claudio Galimberti said in a note on Monday.

Analysts warned that energy markets could still face months of disruption, even if the agreement moves ahead. Oil wells across the Middle East were shut during the conflict and may take weeks to fully resume production.

Bob McNally, president of Rapidan Energy, told ABC’s “This Week”: “I’m very concerned we could see oil prices skyrocket later this summer with crude oil prices heading well into the mid- to high-$100 range.”

Global stock markets also rallied following news of the agreement, while investors continued monitoring developments around the Strait of Hormuz reopening.