Oil Prices Tumble as Strait of Hormuz Reopening Deal Nears

Brent crude tumbled 3.95% to $83.88 per barrel, while WTI fell 4.62% to reach $80.96. The decline reflects a cooling of regional tensions that had driven prices to mid-May peaks. President Trump confirmed the agreement on social media, stating that oil flow would resume following a formal signing ceremony scheduled for Friday in Switzerland. Iranian Deputy Foreign Minister Kazem Gharibabadi corroborated the timeline, noting that the memorandum of understanding is now finalized.

Mediated by Pakistan and Qatar, the deal encompasses a broader de-escalation strategy. According to reports from the Mehr News Agency, terms include a ceasefire in Lebanon, the suspension of oil sanctions, and the release of $24 billion in frozen Iranian assets. Crucially, the agreement allows Iran to resume crude exports during a 60-day ceasefire window. The path to the agreement faced significant volatility, specifically after an Israeli air strike in Beirut prompted a sharp rebuke from the White House. Despite the diplomatic progress, energy traders remain cautious, awaiting the physical clearing of mines from the Strait and the actual resumption of tanker traffic before fully pricing in a return to stability.