Global oil prices fell sharply on Monday after Pakistan announced a framework agreement aimed at ending the conflict between the United States and Iran, raising hopes that the strategically important Strait of Hormuz could soon reopen to normal shipping traffic.
Brent crude, the international oil benchmark, dropped 4.3 per cent to $83.55 per barrel, while US crude fell 4.9 per cent to $80.74. The decline came after Pakistani Prime Minister Shehbaz Sharif said an official signing ceremony for the agreement is expected to take place in Switzerland on June 19.
Iranian Deputy Foreign Minister Kazem Gharibabadi confirmed that a deal with the United States had been finalised, while US President Donald Trump welcomed the development, posting on social media: “Let the oil flow!”
The Strait of Hormuz, through which around one-fifth of global oil and liquefied natural gas shipments normally pass, has remained largely disrupted since the conflict began in February. Analysts cautioned that despite the agreement, restoring full shipping operations could take weeks or even months due to security concerns, vessel backlogs and the need to clear potential hazards in the waterway.
Meanwhile, investor optimism lifted Asian stock markets, with Japan’s Nikkei 225 and South Korea’s KOSPI posting strong gains as markets reacted positively to signs of easing geopolitical tensions.
