Trump's Iran Deal Announcement Sends Brent Crude Below $84 Per Barrel

Global oil prices declined sharply after US President Donald Trump announced that Washington had completed an agreement with Iran that would reopen the Strait of Hormuz, a critical route for global crude oil shipments. The development eased concerns over prolonged disruptions to energy supplies and triggered a broad sell-off in oil markets.

West Texas Intermediate (WTI) crude futures for July delivery fell 4.77 per cent to $80.83 per barrel, while Brent crude futures for August delivery dropped nearly 4 per cent to $83.77 per barrel, slipping below the $84 mark. The decline extended a broader retreat in oil prices as traders responded positively to indications that tensions in the region were easing and that energy flows through the strategically important waterway could soon return to normal.

In a post on Truth Social, Trump declared that the agreement with Iran was complete and announced that the Strait of Hormuz would reopen without a toll system. He also said the United States would end its naval blockade of Iran, a move that could significantly improve the movement of oil and commercial shipping in the region. Trump added that the waterway would formally reopen on Friday following the signing of the agreement in Switzerland.

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The Strait of Hormuz is one of the world's most important energy corridors, historically handling around one-fifth of global oil supplies. Tanker traffic through the route declined sharply earlier this year following attacks and heightened military tensions, contributing to one of the most significant disruptions to oil flows in recent history. While the planned reopening is expected to benefit oil exporters and the global shipping industry, challenges such as mine-clearing operations and maritime security arrangements remain.

Iranian Deputy Foreign Minister Kazem Gharibabadi confirmed that an agreement had been reached but said the final text would be released only after the formal signing ceremony. US Vice President JD Vance indicated that he plans to attend the event, while Pakistan Prime Minister Shehbaz Sharif said the two sides had agreed to a permanent end to military operations and credited ongoing diplomatic efforts for achieving a breakthrough.

Oil prices had surged during the initial stages of the conflict but have gradually eased as diplomatic progress became more apparent. Additional factors weighing on prices included the partial resumption of crude shipments through Hormuz, releases from strategic oil reserves by developed economies and reduced purchases by major importers such as China. Investors are now closely monitoring how quickly shipping activity and crude exports recover once the agreement is formally signed and implemented.

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