Oil futures fall over 4% to $79.50 as a US-Iran agreement reopens the Strait of Hormuz, a key global energy chokepoint.
West Texas Intermediate crude futures slid more than 4% to near $79.50 in European trading Monday after the US and Iran finalized a deal to reopen the Strait of Hormuz. The strait, which handles nearly 20% of global oil supply, had been a flashpoint amid tensions between the two nations.
Oil prices had surged earlier when Iran closed the strait and demanded recognition of its authority. While the recent agreement eases immediate supply concerns, analysts warn that damage to Middle East energy infrastructure during prior conflicts may limit long-term relief.
The memorandum of understanding will be signed June 19 in Switzerland, with the strait’s reopening and US naval blockade lift expected within 30 days under Iranian oversight.