Strait of Hormuz Reopen Deal Pulls Oil Prices Down 4%

Strait of Hormuz – (Web Desk) – The Strait of Hormuz reopen oil prices have fallen sharply after the United States and Iran announced a landmark peace deal. Brent crude dropped over 4% to $83.75 a barrel, while US West Texas Intermediate slid to $80.87 on Monday.

The two countries will officially sign a memorandum of understanding in Switzerland this Friday. Pakistan’s Prime Minister Shehbaz Sharif, who played a key role as mediator, confirmed the signing timeline.

President Trump announced on Sunday that the Strait of Hormuz will open without any toll system. He also said the US naval blockade of Iranian ports will come to an end, allowing ships to move freely again.

Iran’s Mehr news agency reported that the deal includes reopening the strait within 30 days under Iranian arrangements. A broader agreement will be negotiated during a 60-day ceasefire period, according to Iran’s deputy foreign minister Kazem Gharibabadi.

The Strait of Hormuz handles nearly one-fifth of the world’s oil and gas supply. Its closure for over three months caused the biggest oil supply disruption in history, pushing prices as high as $126 a barrel at one point.

Market analysts say the “war risk premium” built into oil prices is now being removed quickly. Traders are pricing in the return of normal oil flows through the region.

However, experts warn that uncertainty remains. Infrastructure damage across the Gulf, mine clearing operations, and the upcoming nuclear talks during the 60-day ceasefire could still cause price swings.

The E4 nations — UK, France, Germany, and Italy — said they are ready to lift sanctions on Iran if Tehran takes agreed steps on its nuclear programme.