Oil prices dropped to their lowest point since March on Monday after President Donald Trump announced a tentative US-Iran peace deal.
Brent crude dipped to $83 per barrel on Monday after markets opened, having previously sat above $90 a barrel for nearly the entire Iran War. Prices remain well above the pre-Operation Epic Fury rate of roughly $72 per barrel.
“The Deal with the Islamic Republic of Iran is now complete. Congratulations to all! I hereby fully authorize the toll free opening of the Strait of Hormuz, and, simultaneously herewith, authorize the immediate removal of the United States Naval blockade. Ships of the World, start your engines. Let the oil flow!” President Donald Trump posted to TruthSocial on June 14. “With the opening of the Strait upon the signing of the Deal on Friday, for purposes of mine removal, oil will flow on both ends again for the Region, and the World!”
Brent crude is a specific oil blend used as a price benchmark for around 80% of oil traded globally, according to Intercontinental Exchange. Oil prices typically increase or decrease according to Brent crude futures.
Gasoline prices move alongside Brent crude prices. Every $10 Brent increase corresponds to a 24-cent per gallon gas price increase.
Maritime traffic through the Strait of Hormuz effectively ended following Iranian retaliation to Operation Epic Fury, which killed Supreme Leader Ayatollah Khamenei and other key officials. Approximately 20% of the global oil supply transits through the Strait of Hormuz.
Brent peaked at $126 after previous negotiations failed and the U.S. blockaded the strait. Prices have dipped following ceasefires and other peace indicators only to rise after skirmishes or diplomatic setbacks.
The deal is to be signed on Friday by both the US and Iran, Pakistan’s Prime Minister Shehbaz Sharif announced. Sharif was first to announce that a deal had been reached.
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