Key facts
- Oil prices fell to a three-month low following a US-Iran agreement to reopen the Strait of Hormuz.
- European natural gas prices dropped 6% on the news.
- The deal aims to reopen the Strait of Hormuz within 30 days, contingent on US sanctions relief.
- Zimbabwe's central bank cut interest rates, a global first, coinciding with the energy market easing.
- US petrol prices fell below $4 per gallon.
- Oil buyers are testing the waters following the potential US-Iran deal.
- The Dow industrials closed at a record after the announcement.
Oil prices plummeted to a three-month low and European natural gas prices tumbled 6% following the announcement of a preliminary US-Iran framework agreement to reopen the Strait of Hormuz. The deal, scheduled to be signed on June 19, 2026, aims to ease market anxiety over prolonged energy disruptions and potentially lift US sanctions on Iran.
European natural gas futures (Dutch TTF) traded at €43.60/MWh, a five-week low, while the pan-European STOXX 600 index reached record highs. The closure of the Strait of Hormuz, through which approximately 20% of the world's LNG supply passes, had previously forced buyers into bidding wars for alternative shipments, causing spot prices in Asia to spike.
Analysts note that restarting LNG production and rerouting transit could take up to six weeks to reach normal operational capacity due to the time required for equipment cooling and complex processing. Despite the sharp price declines, European energy prices remain about 50% higher than pre-conflict levels. Market volatility is expected to persist as the framework agreement details are finalized, and ongoing efforts to refill winter storage reserves will keep demand elevated.
US stock futures rose, and US companies capitalized on the optimism by offloading over $40 billion in debt. UK bond yields also fell to a two-month low. The average US petrol price has fallen below $4.
Zimbabwe's central bank announced an interest rate cut, marking a global first. This decision coincided with news that the US and Iran have reached a preliminary peace agreement to reopen the Strait of Hormuz, which led to a decrease in oil prices.
Oil buyers are now testing the waters following the potential US-Iran deal.