KEY POINTS
- Global oil prices dropped to about $82 per barrel after reports of a peace deal involving the US, Israel, and Iran.
- Brent and WTI crude both declined as the Strait of Hormuz is expected to reopen, easing supply fears.
- Officials say the agreement ends the conflict and could stabilise global energy markets after months of volatility.
Global crude oil prices fell sharply on Monday, dropping to about $82 per barrel after the United States, Israel, and Iran reportedly reached an agreement to end months of hostilities in the Middle East and reopen the strategic Strait of Hormuz.
Brent crude, the international benchmark for oil pricing, declined by about 5 percent to $82.90 per barrel. The last time oil traded at similar levels was in March, before tensions escalated in the region.
Similarly, West Texas Intermediate (WTI) crude dropped by about 4 percent, settling at around $80 per barrel.
The decline marks a significant reversal from earlier months when geopolitical tensions in the Middle East pushed oil prices to higher levels. At the peak of the conflict in April, crude oil reportedly surged to as high as $125 per barrel, driven by fears of supply disruptions.
According to reports, the recent price drop followed the announcement of a peace deal involving the United States, Israel, and Iran, aimed at ending the conflict and restoring stability in global energy supply routes, particularly the Strait of Hormuz, a key passage for global oil shipments.
The agreement is expected to be formally signed in Switzerland later in the week, with provisions that include reopening the waterway and ending military hostilities across multiple fronts, including Lebanon.
Former US President Donald Trump announced the development on social media, describing the agreement as finalized and calling for global shipping activity to resume without restriction.
Shortly after the announcement, Iranian officials confirmed the development. Kazem Gharibabadi, Iran’s deputy foreign minister, said the agreement effectively brings an immediate end to the war, with further diplomatic talks expected within two months to finalise a broader and lasting settlement.
The Strait of Hormuz, one of the world’s most critical oil transit routes, plays a major role in global energy supply, and its reopening is expected to ease pressure on oil markets and stabilise prices in the short term.
Market analysts say the price drop reflects renewed optimism about global supply stability following months of volatility driven by conflict and geopolitical uncertainty.
