Oil prices fell in Asia on Monday after Pakistan, which has been mediating an end to the US-Iran war, announced a framework deal that President Donald Trump said would see the reopening of the key Strait of Hormuz shipping route.
Brent crude, the global oil benchmark, was 4.3% lower at $83.55 (£62.10) a barrel, while US-traded oil was down by 4.9% at $80.74.
Pakistan’s prime minister Shehbaz Sharif said an official signing ceremony would be held on Friday, 19 June in Switzerland.
Iran’s Deputy Foreign Minister Kazem Gharibabadi confirmed in a phone call on state TV that a deal with the US had been finalised, while Trump posted on social media “let the oil flow!”.
But Vandana Hari from energy markets analysis firm Vanda Insights said a lack of detail on what has been agreed “is likely to inject unease and uncertainty into the market.”
This could mean a week of uncertainty and volatility for the oil market, she added.
The Strait of Hormuz has been effectively closed since shortly after the US and Israel launched airstrikes on Iran on 28 February.
After the conflict began, Tehran threatened to attack vessels using the crucial waterway, through which around 20% of the world’s oil and liquefied natural gas (LNG) normally passes.
Global energy markets have been on a wild ride in recent months, with prices often rising or falling sharply in response to developments in the US-Israel war with Iran.
Brent crude, which was trading at around $70 a barrel before the conflict started, peaked at about $120 during the war.
