Crude oil prices tumbled following a preliminary peace agreement between the United States and Iran. The deal ends a three-month conflict and reopens the Strait of Hormuz. This vital shipping channel carries approximately 20% of the world's oil supply.
Brent crude fell over 5% to trade below $83 a barrel. West Texas Intermediate dropped roughly 5% to reach $80 a barrel. Both benchmarks hit their lowest prices in three months. Oil previously reached $120 a barrel during the height of the conflict.
The formal signing of the agreement is scheduled for later this week. Analysts note that restoring production and shipping logistics will take time. The price drop reflects a significant reduction in global geopolitical supply risks.