London, Jun 15 (V7N) - Global oil prices plummeted on Monday following the historic announcement of a preliminary peace agreement between the United States and Iran. Both nations have confirmed the breakthrough framework, brokered by Pakistan, with the formal signing ceremony scheduled to take place in Switzerland this coming Friday.
Following the diplomatic breakthrough, international benchmark Brent crude futures sank by $3.58 per barrel, or 4.10 percent, to settle at $83.75. Simultaneously, US West Texas Intermediate (WTI) crude saw an even sharper decline, dropping by $4.01, or 4.72 percent, to trade at $80.87 per barrel.
Market analysts noted that the sudden de-escalation has drastically altered global energy risk premiums. "The overvaluation of geopolitical risks associated with oil prices is now rapidly decreasing, as traders are considering the possibility of normalizing oil supplies," said Tim Waterer, chief market analyst at KCM Trade.
The maritime conflict had effectively choked off the Strait of Hormuz for more than three months, severely disrupting the global supply of millions of barrels of crude oil and gas. The strategic waterway is considered the world's most critical energy transit choke point, handling roughly one-fifth of the globe's total petroleum and liquefied natural gas (LNG) consumption.
According to a report by Iran's semi-official Mehr News Agency, the draft agreement establishes a clear timeline for restoring maritime trade. The framework mandates that the Strait of Hormuz will be fully reopened to international shipping under Iranian supervision within the next 30 days.
The rapid cooling of energy markets is expected to provide significant economic relief worldwide, easing inflationary pressures that had mounted during the hundred-day naval standoff.
END/SMA/AJ
