Oil prices slide 5% after a US-Iran agreement lifts sanctions and reopens the Strait of Hormuz, reducing supply disruption risks.
West Texas Intermediate crude fell to $78.60 per barrel, a three-month low, after a 5% decline on Monday. The drop followed a US-Iran deal announced Sunday, which lifts a naval blockade and sanctions in exchange for Tehran dismantling its nuclear program.
Prices had been pressured by easing supply concerns as the Strait of Hormuz, a critical chokepoint for 20 million barrels per day, is set to reopen. Analysts caution full traffic restoration may take weeks or months, despite Iran’s plan to reopen the route within 30 days.
Markets reacted to the geopolitical shift, with European nations and the US preparing to lift economic restrictions. Israeli military commitments in Lebanon, Syria, and Gaza remain unchanged, adding a layer of regional stability concerns.