Key Takeaways

• Oil slumps 4%+: Brent fell 4.1% to $83.79 per barrel, while WTI dropped 4.6% to $80.99 — the lowest levels since March 10.
• Losses extend from last week: Both contracts continued their steep decline as peace deal optimism builds.
• MOU announced Sunday: Trump and Iranian officials confirmed a framework agreement to halt hostilities and reopen the Strait of Hormuz.
• Trump’s declaration: “I hereby fully authorize the toll free opening of the Strait of Hormuz… Ships of the World, start your engines. Let the oil flow!”
• U.S. naval blockade lifted: Trump simultaneously authorized the removal of Washington’s blockade of Iranian ports.
• Signing by Friday: The formal agreement is expected to be signed this week; Iran said a more expansive deal would be negotiated during a 60-day ceasefire.
• 30-day Hormuz reopening: Iran’s Mehr news agency said the draft calls for reopening the strait within 30 days under Iranian arrangements.
• Deal details emerging: The draft reportedly includes sanctions relief, limits on Iran’s nuclear activities, and measures to normalize oil exports.
• Iranian barrels returning: The prospect of additional Iranian supply hitting global markets added pressure to prices.
• Brent peaked above $120: The contract had surged to those levels at the height of the crisis — now rapidly unwinding.
• Analysts urge caution: The ceasefire still requires formal implementation; tanker traffic may not immediately return to pre-war levels.
• Fed meeting June 16-17: The central bank is widely expected to hold rates steady; investors will watch for updated economic projections.

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Oil prices slumped more than 4% on Monday after the United States and Iran reached an interim peace agreement aimed at ending months of conflict in the Middle East and reopening the Strait of Hormuz.

As of 02:17 ET (06:17 GMT), Brent oil futures expiring in August fell 4.1% to $83.79 per barrel, while West Texas Intermediate (WTI) crude futures dropped 4.6% to $80.99 per barrel.

The declines extended losses from last week and pushed both benchmarks to their lowest levels since March 10.

“Ships of the World, Start Your Engines”

U.S. President Donald Trump and Iranian officials announced a framework agreement on Sunday that would halt hostilities and allow maritime traffic to resume through the Strait of Hormuz.

“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,” Trump said in a social media post.

“Ships of the World, start your engines. Let the oil flow!” he added.

The agreement is expected to be signed by Friday. Iran said a more expansive deal would be negotiated during a 60-day ceasefire period.

Iran’s Mehr news agency reported that the draft agreement called for reopening the Hormuz within 30 days under Iranian arrangements.

Draft details reportedly include sanctions relief, limits on Iran’s nuclear activities, and measures to normalize oil exports — boosting expectations of improved supply availability later this year.

Hormuz the Central Focus

The prospect of reopening the waterway has become the primary focus for oil markets. It handles roughly a fifth of global oil and fuel consumption and has been at the center of supply concerns since the conflict erupted earlier this year.

Shipping disruptions, elevated insurance costs, and fears of prolonged shortages had helped propel Brent crude above $120 a barrel at the height of the crisis.

The prospect of additional Iranian barrels reaching global markets also added downward pressure to prices.

Despite the market’s relief, analysts cautioned that risks remain. The ceasefire framework still requires formal implementation, while tanker traffic through Hormuz may not immediately return to pre-war levels even if the waterway fully reopens.

Investors are also watching a busy week for central banks, including the U.S. Federal Reserve’s policy meeting due on June 16-17. The Fed is expected to keep rates steady as investors watch for updated economic projections.