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Energy Market · Iran Deal · Oil Prices · Strait Of Hormuz
Oil prices fell to a three-month low on Tuesday as the U.S. reportedly agreed to allow Iran to immediately sell crude under a deal to end conflict, with Brent crude futures dropping 5% to $78.96 per barrel and U.S. West Texas Intermediate futures losing 5.8% to $76.05.
The Wall Street Journal reported that oil sanctions relief for Iran takes effect immediately after the agreement is signed. A senior U.S. official told CNBC that Iran must adhere to commitments, including not pursuing nuclear weapons, neutralizing enriched uranium, and ensuring free passage through the Strait of Hormuz.
President Donald Trump announced the peace framework with Iran has been signed, stating the Strait of Hormuz will "completely reopen" on Friday, free of Iranian tolls, with a formal signing ceremony in Geneva. However, Amos Hochstein, former energy advisor, expressed skepticism to CNBC's "Squawk Box" due to the lack of a public text.
Shipping giants like Hapag-Lloyd welcomed the news, hoping their ships pass through Hormuz this weekend, but Mitsui OSK Lines CEO Jotaro Tamura told the Financial Times that full normalization of traffic through the Strait, which previously accounted for 20% of global oil supply, will take weeks as operators require material assurances beyond a simple agreement.
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