Oil prices fell sharply on Monday after reports that the United States and Iran have reached an agreement to end their ongoing conflict and resume normal maritime traffic through the strategic Strait of Hormuz, easing fears of supply disruptions.
Brent crude futures fell $4.08, or 4.7%, to $83.25 a barrel by 0415 GMT and U.S. West Texas Intermediate was at $80.53, down $4.35, or 5.1%.
The market reaction came after US President Donald Trump and Iran’s Deputy Foreign Minister signaled that a peace agreement had been reached, aimed at halting military operations and restoring free movement through the vital oil shipping route.
In a post on X, Pakistan’s Prime Minister Shehbaz Sharif also confirmed that a deal had been concluded following intensive talks, stating that both sides had agreed to an immediate and permanent cessation of military operations on all fronts, including Lebanon.
Separately, US President Donald Trump confirmed the development on his Truth Social platform, describing it as a completed agreement with Iran and announcing the reopening of the Strait of Hormuz for global shipping.
Trump said the decision would allow the removal of the US naval blockade and called for the resumption of global oil flow, signaling a major de-escalation in regional tensions.
The announcement triggered an immediate response in global energy markets, with oil prices sliding on expectations of improved supply stability and reduced geopolitical risk in the Gulf region.
In a statement, the secretariat of Iran's Supreme National Security Council said war and military operations on all fronts, including Lebanon, would end permanently starting on Monday night.
