Global Oil Prices fell to their lowest level since March on Monday after the United States and Iran announced a preliminary agreement aimed at ending hostilities and reopening the Strait of Hormuz, a key global energy route. The development eased geopolitical tensions that had supported higher crude prices.
Brent crude futures declined by $4.08, or 4.7%, to $83.25 per barrel, while US West Texas Intermediate (WTI) dropped $4.35, or 5.1%, to $80.53. Both benchmarks hit their weakest levels since March 10, extending losses from the previous trading session.
The decline in Oil Prices followed statements from US President Donald Trump and Iranian officials confirming progress on a framework deal to restore maritime traffic through the Strait of Hormuz. The waterway is crucial for global energy shipments, handling nearly one-fifth of the world’s oil supply.
Market analysts said the easing of geopolitical risk led to a sharp unwinding of the “risk premium” built into crude prices. Investors reacted quickly to expectations that oil flows from the Middle East could normalize in the coming weeks.
The agreement reportedly includes reopening the Strait of Hormuz within 30 days under Iranian arrangements, with a memorandum of understanding expected to be signed in Switzerland. The development has raised hopes of improved energy supply stability.
Experts noted that although Oil Prices have fallen, uncertainty remains over how quickly production and exports in the region will fully recover after months of disruption. Infrastructure damage and logistical challenges could still impact supply chains.
Analysts also warned that while Oil Prices may stabilize further if supply normalizes, the long-term outlook will depend on compliance with the agreement and broader geopolitical developments in the Middle East.
