Oil prices plunge as US-Iran confirm deal to end military action, crude oil prices crash 5 %
PTC News Desk: Oil prices dropped to their lowest level since March on Monday after US President Donald Trump and Iran's deputy foreign minister announced a preliminary agreement to end the conflict and restore shipping through the Strait of Hormuz.
Brent crude fell by $3.58, or 4.1%, to $83.75 per barrel, while US West Texas Intermediate (WTI) crude dropped $4.01, or 4.72%, to $80.87 per barrel. Both oil benchmarks had already fallen by more than 3% in the previous trading session.
According to Pakistan’s prime minister, the United States and Iran are expected to sign a memorandum of understanding in Switzerland on Friday. Pakistan has been helping mediate the talks between the two countries.
On Sunday, Trump said the Strait of Hormuz would reopen without transit fees and that the US naval blockade of Iranian ports would be removed. Before the conflict began, around 130 ships passed through the strategic waterway each day. However, attacks on commercial vessels and concerns about crew safety have sharply reduced traffic.
Although shipping is expected to resume, experts say it may take time to clear the backlog of vessels waiting to pass through the strait. A normal transit takes about eight hours, and additional security measures could slow operations further.
Despite the agreement, security concerns remain. The Strait of Hormuz is a crucial route for oil exports from Gulf countries and for Qatar’s liquefied natural gas shipments, making it vital to global energy supplies.
Industry estimates indicate that 46 ships have been attacked since the conflict started on February 28, while Iran has reportedly seized two container ships during the same period.
- With inputs from agencies
