Crude prices fell sharply after a 60-day deal to keep the Strait toll-free eased supply disruption fears in global markets.
Crude oil futures plunged nearly 5% on Monday, hitting their lowest levels since the early stages of the U.S.-Iran conflict, after both nations confirmed a deal to reopen the Strait of Hormuz. The agreement ensures the critical chokepoint remains toll-free for 60 days, though long-term terms remain uncertain.
Prior to the deal, oil prices had surged amid fears of prolonged disruptions in the region, which accounts for roughly one-fifth of global supply. Analysts had warned of potential spikes to $100 per barrel if tensions escalated further.
Markets reacted swiftly to the news, with front-month Brent and WTI contracts retreating from recent highs. The relief rally in equities and risk assets also reflected reduced geopolitical premiums.