Oil prices plunge as US and Iran announce peace deal – is cheaper fuel coming at last?

Oil prices plunged and global stocks rallied after the US and Iran agreed a deal to end their war and reopen the Strait of Hormuz.

Cheaper fuel could be on the horizon for the world and South Africa after a peace deal was reached between the US and Iran, which is expected to see the Strait of Hormuz reopening toll-free. The news sent global stocks soaring on Monday, while oil prices tumbled on the news.

The two sides confirmed an announcement brokered by mediator Pakistan, with a signing ceremony scheduled in Switzerland on June 19. The agreement is set to end three months of conflict that had driven energy prices sharply higher and fuelled renewed concerns about a global inflation spike.

The Strait of Hormuz – a key maritime chokepoint responsible for roughly a fifth of global crude oil flows – was effectively shut by Tehran shortly after US-Israeli strikes on Iran began the conflict on February 28.

"The Deal with the Islamic Republic of Iran is now complete," US President Donald Trump wrote on social media Sunday as he marked his 80th birthday.