Crude oil prices fell sharply after the United States and Iran announced a framework agreement to end the war. US President Donald Trump It said the agreement would help reopen the important Strait of Hormuz shipping route. Following the news, Brent crude oil prices fell 4.7% to $83.24 per barrel. Global stock markets reacted positively, with share prices rising in Asia and Europe.
Pakistan, which is helping the United States and Iran hold talks, said a formal signing ceremony was expected to take place on June 19 in Switzerland. Iranian Deputy Foreign Minister Kazem Garibaldi also confirmed on state television that the agreement with the United States had been finalized. Trump also celebrated the development on social media, posting: “Let the oil flow!”
Strait of Hormuz reopened
Since the United States and Israel launched air strikes against Iran on February 28, the Strait of Hormuz has been basically closed. During the conflict, Iran threatened ships passing through the strait, raising concerns about global energy supplies. About 20% of the world’s oil and liquefied natural gas (LNG) typically pass through Strait of HormuzAccording to the British Broadcasting Corporation (BBC). As a result of the war, global oil prices fluctuated sharply up and down for several months.
Brent crude oil prices rise
Before the conflict broke out, Brent crude oil prices were around $70 per barrel. During the war, the price of Brent crude oil soared to nearly $120 per barrel. Investors welcomed the peace framework, sending shares in Asia sharply higher. After the news was announced, Japan’s Nikkei 225 index rose 5%. According to the BBC, South Korea’s Composite Stock Price Index rose 5.2%.
Asian countries have been hit hard by high energy prices, as many rely on Middle Eastern oil and gas. European markets also rose on news of the deal. Germany’s DAX index rose about 1.7%. France’s CAC 40 index rose about 1.7%. According to the BBC, London’s FTSE 100 index rose 0.6%.
Oil supply challenges remain
oil price It is down about $25 from its wartime peak. However, analysts warned that the market may still face supply-related challenges even after the peace deal is signed. Futures contracts suggest oil prices may not fall below $70 a barrel by the end of 2031. Analysts said the market understands that major supply challenges remain, CNN reported.
Overall, the peace framework has pushed crude prices lower for now, but analysts say it may take some time for global energy markets to fully stabilize.
