Crude oil prices fell to a three-month low Monday after President Donald Trump announced that the United States and Iran had reached a deal, which resumed tanker traffic through the Strait of Hormuz. Benchmark crude fell nearly 5% to around $83 per barrel, while U.S. West Texas Intermediate crude dropped below $81 per barrel for the first time since March. The sharp decline came after Trump said a preliminary agreement had been reached with Iran that would lead to the reopening of the Strait of Hormuz, a critical shipping lane through which one-fifth of the world’s oil supply passes.
Prices started on a downward trend Friday after Trump said a deal with Iran was imminent, with WTI dropping roughly $3 per barrel from Thursday’s price.
Markets have spent months pricing in the risk of prolonged disruptions to oil shipments following the conflict between the U.S. and Iran and the closure of the strait. Oil prices had surged above $120 per barrel during the height of the crisis before retreating as negotiations gained momentum.
Trump announced the agreement in a social media post Sunday, describing it as complete ahead of a formal signing expected later this week. Under the framework, commercial shipping would gradually resume through the strait before its reopening on Friday as border negotiations continue on Iran’s nuclear program and sanctions relief.
