Brent oil price drops under $80 on US-Iran deal

Oil prices fell to a three-month low Tuesday on optimism over the expected reopening of the Strait of Hormuz after a peace deal between the United States and Iran.

Brent North Sea crude, the international benchmark, dropped 4.0 percent to $79.87 a barrel, dipping below $80 for the first time since early March.

The main US oil contract, West Texas Intermediate, slid 4.5 percent to $77.16 a barrel.

US President Donald Trump said the Strait of Hormuz would "completely open" once Washington and Iran sign their peace agreement on Friday in Switzerland.

Iran had effectively halted tanker traffic through the vital waterway in retaliation for US and Israeli strikes launched in late February, choking off oil and gas traffic and sending crude prices skyrocketing.

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"Traders are pricing in the reopening of the Strait of Hormuz as the most immediate and positive result of any peace deal," said David Morrison, senior market analyst at broker Trade Nation.

While Iranian officials have threatened to impose tolls on ships passing through the crucial channel, "as far as oil traders are concerned, they see a market which is loosening up at last," Morrison said.

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