Oil Prices Slide as Pakistan Announces US-Iran Deal to Reopen Strait of Hormuz

Global oil prices experienced a sharp decline in early Asian trading following Pakistan's announcement of a brokered deal between the United States and Iran. The agreement is expected to lead to the reopening of the critical Strait of Hormuz shipping route, a development confirmed by President Donald Trump who stated, “oil will flow.”

Brent crude, the international oil benchmark, fell by 3.8% to $84.02 a barrel, while US-traded oil saw a 4.1% decrease, trading at $81.40. Pakistan's Prime Minister Shehbaz Sharif indicated that an official signing ceremony for the deal would take place on Friday, June 19, in Switzerland.

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oil will flow

The Strait of Hormuz, through which approximately 20% of the world's oil and liquefied natural gas typically passes, had been effectively closed since shortly after the US and Israel launched airstrikes on Iran on February 28. Tehran had previously threatened to target vessels navigating this vital waterway.

Energy markets have been highly volatile in recent months, with prices fluctuating dramatically based on developments in the conflict between the US and Iran. Brent crude, which was trading around $70 a barrel before the conflict began, had previously peaked at approximately $120 during the war.

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an official signing ceremony would be on Friday, 19 June in Switzerland.