Oil prices fall as shipping resumes after US-Iran war-ending deal

Benchmark Brent crude futures fell by more than 2% to below $78 a barrel, reaching their lowest point since the conflict began, as global energy supplies stabilized following a US-Iran agreement to end the war. Three Saudi-flagged supertankers carrying 6 million barrels of crude successfully navigated the Strait of Hormuz.

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Benchmark Brent crude futures prices fell by another 2% to below $78 a barrel, the lowest since the shooting began.

The "memorandum of understanding" signed by US President Donald Trump and Iran's President Masoud Pezeshkian mandates the immediate opening of the Strait of Hormuz and the lifting of US blockades on Iranian ports. While shippers anticipate a gradual return to pre-war transit levels, with ongoing efforts to ensure safe passage and clear mines, the immediate impact was evident as vessels resumed broadcasting their locations.

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The US-Iranian memorandum starts the clock on a 60-day negotiation period to reach a final settlement to the war, which Trump launched in February alongside Israeli Prime Minister Benjamin Netanyahu.

The memorandum initiates a 60-day negotiation period for a final settlement. Notably, it explicitly calls for the "permanent termination" of the war in Lebanon and the assurance of its "territorial integrity and sovereignty." This marks a significant concession to Iran, which has consistently linked any peace deal to the situation in Lebanon.

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But Israel, which launched an invasion in March and has since seized a large swathe of southern Lebanon in its pursuit of Hezbollah militants who opened fire across the border in support of Iran, was excluded from the negotiations.

Despite the agreement, Israeli forces launched new airstrikes in southern Lebanon, resulting in at least one fatality, casting doubt on the immediate cessation of hostilities. Trump had previously expressed criticism of Israel's operations in Lebanon, citing unnecessary destruction. Israel is reportedly in negotiations with the US regarding its troop deployment in southern Lebanon.

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With Lebanon among the peace effort's most delicate issues, Trump in recent days has become openly critical of his ally's operations there, accusing Israel of unnecessarily destroying entire buildings to hit Hezbollah fighters.