Oil prices dropped after reports of a US–Iran agreement to reopen the Strait of Hormuz, raising hopes of improved global supply and reduced geopolitical tension.
Global oil prices fell sharply after reports that the United States and Iran have reached an agreement in principle to ease tensions and reopen the Strait of Hormuz, a critical route for about one-fifth of global oil shipments.
Brent crude and U.S. West Texas Intermediate both declined by more than 5%, as traders reacted to expectations of improved supply flows and reduced geopolitical risk.
The deal is seen as an attempt to stabilize energy markets and support a broader ceasefire framework linked to ongoing US–Iran negotiations, including discussions around Iran’s nuclear programme.
Analysts caution that even if the agreement holds, full normalization of oil shipments could take months due to damaged infrastructure, shipping disruptions, and depleted inventories built up during the conflict.
Markets also responded positively across equities, reflecting easing concerns over inflation and energy shortages.
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