Washington, Jun 15

Crude oil prices fell sharply dropping to their lowest levels in more than three months after the US and Iran agreed to extend their ceasefire, boosting expectations that shipping through the Strait of Hormuz could soon return to levels closer to their pre-war setting.

Brent crude, the global benchmark, fell 3.6% to $84.21 a barrel after initially posting even steeper losses. US benchmark West Texas Intermediate (WTI) dropped more than 4% to $81.38 a barrel, reports Axios.

The decline comes amid reports that Washington and Tehran had reached an agreement that could pave the way for the reopening of the strategic waterway, through which roughly one-fifth of global oil trade normally passes.
Due to the strait's disruption, tanker traffic in the strait fell to an all-time low and triggered a sharp rise in energy prices worldwide.

The resulting supply shock led to surging fuel costs across all major economies such as China, Japan, South Korea, GCC nations, the EU, Britain, Singapore and drove US petrol prices to their highest levels since 2022, adding to the many economic and political woes of the ruling GOP ahead of the midterm elections.

Average US petrol prices climbed to around $4.56 per gallon in May before easing in recent weeks. According to AAA data, the national average has since fallen to about $4.07 per gallon, although that remains more than $1 above pre-war levels.

The latest agreement is considered as being the most significant diplomatic breakthrough since the war began, and if implemented, could substantially boost tanker traffic through the Strait of Hormuz and help ease concerns over global energy supplies.

Questions continue to hover over how quickly shipowners and operators will regain confidence in using the route after months of disruption and security concerns.

The market also faces practical challenges. Even if the waterway is fully reopened, Gulf producers that reduced output when exports were disrupted will need time to restore production and rebuild supply chains.

As a result, while oil prices have reacted quickly to signs of progress, industry experts expect the process of normalising energy markets to take considerably longer, with pre-war shipping unlikely to be restored any time soon.

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Tehran, June 15 (Sputnik/UNI)

Iran has confirmed the completion of a Memorandum of Understanding (MoU) with the United States; it will be signed in Switzerland on June 19, Iranian Deputy Foreign Minister Kazem Gharibabadi said.

"The text of the Memorandum of Understanding has been finalised, and the official signing of the memorandum will take place in Switzerland on Friday," Gharibabadi said live on Iranian state television. The lifting of the US naval blockade against Iran will begin on the night of Monday, he said.

The Iran-US memorandum includes an immediate cessation of military operations on all fronts, including in Lebanon, starting on the night of Monday, Gharibabadi confirmed.

"This memorandum does not signify trust in the enemy. The memorandum was drafted with no confidence in it. We will monitor the actions of the United States, as well as its fulfillment of its obligations," he noted.

Iran will discuss sanctions relief, nuclear issues, and economic recovery with the United States after signing a memorandum on June 19, the deputy foreign minister added.

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Washington, June 15 (Sputnik/UNI)

US President Donald Trump on Sunday confirmed that an agreement had been reached with Iran, describing it as a significant diplomatic breakthrough.

"The Deal with the Islamic Republic of Iran is now complete. Congratulations to all!" Trump wrote on his Truth Social platform.

Following the announcement, Trump said he had authorised the reopening of the strategically vital Strait of Hormuz and ordered the immediate removal of the US naval blockade.

"I hereby fully authorise the toll-free opening of the Strait of Hormuz, and, simultaneously herewith, authorise the immediate removal of the United States Naval blockade. Ships of the world, start your engines. Let the oil flow!" Trump said in a post on social media.

Earlier, Pakistan Prime Minister Shehbaz Sharif had announced that a peace agreement between the United States and Iran had been successfully negotiated. According to Sharif, both sides agreed to an immediate and permanent cessation of military operations on all fronts, including Lebanon.

"Following intensive talks, we are pleased to announce that the Peace Deal between the United States of America and the Islamic Republic of Iran has been reached," Sharif said in a post on X.

He added that the two countries would formally sign the agreement in Switzerland on June 19.

"Both sides have declared the immediate and permanent termination of military operations on all fronts, including in Lebanon. The official signing ceremony will be on Friday, June 19, in Switzerland," Sharif stated.

The Strait of Hormuz, one of the world's most important oil transit routes, has long been a focal point of tensions in the Gulf region. The reported agreement and reopening of the waterway could have significant implications for global energy markets and regional stability.