Oil Prices Drop After US-Iran Announce Framework Peace Deal

Fez– Oil prices fell sharply, and stock markets around the world moved higher on Monday after the US and Iran announced a framework agreement aimed at ending months of conflict and reopening the Strait of Hormuz, one of the world’s most important energy routes.

According to the BBC, Brent crude, the international benchmark for oil prices, dropped by nearly 5% to $83.24 a barrel as investors welcomed signs of de-escalation in the Middle East. 

Stock markets across Asia and Europe also recorded strong gains following the announcement.

US President Donald Trump said the agreement would pave the way for the reopening of the Strait of Hormuz, which has been largely closed since fighting between the United States, Israel and Iran escalated earlier this year. 

Trump celebrated the news on social media, writing: “Let the oil flow!”

Pakistan, which has played a mediating role in negotiations between Washington and Tehran, announced that an official signing ceremony is expected to take place in Switzerland on June 19.

Iran also confirmed progress toward an agreement. Deputy Foreign Minister Kazem Gharibabadi said during an appearance on state television that the deal with the United States had been finalized.

The announcement brought immediate relief to global energy markets, which have experienced months of uncertainty since the conflict began. 

Before the war, Brent crude traded at around $70 per barrel. Prices later surged to nearly $120 as fears grew over disruptions to energy supplies.

Asian markets reacted positively to the news. Japan’s Nikkei 225 index rose 5%, while South Korea’s Kospi gained more than 5%. 

European markets also advanced, with Germany’s DAX and France’s CAC 40 both climbing around 1.7%, while London’s FTSE 100 added 0.6%.

Despite the optimism, analysts warned that uncertainty remains because the details of the agreement have not yet been made public.

Vandana Hari, founder of energy market analysis firm Vanda Insights, said the lack of clarity could create volatility in the coming days as traders assess the impact of the deal.

Experts also cautioned that oil shipments through the Strait of Hormuz are unlikely to return to normal immediately. 

Mines may still need to be cleared from parts of the waterway, and dozens of tankers are waiting to pass through.

Andrew Lipow, president of Lipow Oil Associates, said restoring normal operations could take several weeks or even months. 

Retired US Navy Rear Admiral Mark Montgomery echoed that view, saying a full recovery in shipping and oil production would not happen overnight.

For now, however, global markets are betting that the agreement marks a turning point in one of the most significant geopolitical crises of the year.