Key facts
- Oil prices fell below $80 per barrel, reaching a three-month low.
- The decline is driven by optimism over the reopening of the Strait of Hormuz.
- A US-Iran peace agreement is expected to allow traffic through the strait by the end of the week.
- Brent crude for next month's delivery traded at $78.37 a barrel.
- WTI crude traded at $75.45 a barrel.
Oil prices sank to a three-month low, trading below $80 per barrel, as markets grew increasingly confident that the Strait of Hormuz will reopen. This optimism follows an interim peace agreement between the US and Iran, expected to restore traffic through the critical shipping route by the end of the week. The de facto closure of the strait since February 28, due to the Iran war, had caused significant supply disruptions, pushing Brent crude prices near $120 a barrel at one point. US President Donald Trump announced on Monday that the strait would be fully open by Friday. Brent crude for next month's delivery was trading at $78.37 a barrel, and the US benchmark WTI cost $75.45 a barrel. European natural gas prices also fell below €42 per megawatt-hour. The International Energy Agency described the situation as the largest supply disruption in the history of the global oil market. Despite the sharp price drop, analysts caution that it could take months for the energy industry to fully recover due to depleted inventories and remaining negotiation hurdles, such as Iran's nuclear program. Questions also remain about the speed of regional production recovery and potential damage to facilities like Qatar's Ras Laffan industrial complex.