LONDON, United Kingdom — Global crude oil prices dropped to $82 a barrel on Monday after the United States, Israel, and Iran reached a landmark peace deal ending months of hostilities across the Middle East, including the conflicts in Lebanon and the strategic Strait of Hormuz.
Brent crude, the international benchmark, fell by approximately 5 percent to $82.90 per barrel, marking one of the steepest single-day declines since the war erupted on February 28. West Texas Intermediate (WTI) crude similarly tumbled by 5.8 percent to trade around $79.98 per barrel, according to market data from the Intercontinental Exchange.
The sharp decline followed Sunday’s announcement by Washington, Tehran, and Israeli officials that they had agreed to a comprehensive ceasefire and a framework for peace. The deal effectively ends Israeli military operations in Lebanon and paves the way for the full reopening of the Strait of Hormuz, one of the world’s most vital oil transit routes through which approximately 20 percent of global crude oil supplies typically pass.
US President Donald Trump announced the breakthrough on his Truth Social platform, stating, “I can confirm that the agreement with the Islamic Republic of Iran is now complete.” He subsequently ordered the immediate removal of the US military blockade at the Strait of Hormuz and declared that the waterway would reopen for shipping.
“Ships around the world, start your engines. Let the oil flow,” Trump wrote, signalling a dramatic reversal of the hostilities that had disrupted global energy markets for more than three months.
The peace agreement, reportedly brokered by Pakistan alongside several Middle Eastern nations, establishes a framework for restoring diplomatic engagement between the United States and Iran. The two countries are expected to sign a memorandum of understanding in Switzerland later this week, which will be followed by 60 days of negotiations toward a final comprehensive agreement addressing outstanding issues, including Iran’s nuclear programme.
The Strait of Hormuz had remained closed since the outbreak of hostilities on February 28, when the United States and Israel launched military operations against Iran. The closure removed millions of barrels of oil and liquefied natural gas from international markets, triggering significant volatility and pushing Brent crude above the $100-per-barrel threshold for the first time in years.
The disruption had driven energy costs to multi-year highs, contributing to inflationary pressures across several economies, including Nigeria, where petrol and diesel prices surged sharply during the conflict period.
According to the peace deal, the Strait of Hormuz is expected to reopen fully by June 19, allowing oil tankers to resume normal transit through the waterway. President Trump confirmed that the United States would remove its naval blockade of Iranian ports, while Iranian authorities are expected to coordinate arrangements for safe passage through the strait.
Market analysts anticipate that crude prices could moderate further in the coming weeks as supply disruptions ease and global inventories rebuild. The removal of the geopolitical risk premium, which had been priced into crude futures since February, is likely to continue exerting downward pressure on prices.
For oil-importing nations like Nigeria, the decline in crude prices could eventually translate into lower petrol, diesel, and aviation fuel costs, providing relief to consumers and businesses that have grappled with elevated energy expenses throughout the conflict. However, the drop also reduces revenue for oil-exporting countries, creating a mixed outlook for global energy markets.
Iran’s Foreign Minister Abbas Araghchi confirmed that all channels for communication with the US remain open, though Iranian officials have noted that the current memorandum of understanding contains “ambiguities” that await clarification in upcoming negotiations.
The Islamic Revolutionary Guards Corps had previously announced that Iranian naval forces fired warning shots toward US destroyers operating in the Sea of Oman, though US Central Command denied its ships being attacked. With the peace agreement now in place, such confrontations are expected to cease.
As global oil markets adjust to the new geopolitical reality, the focus now shifts to the implementation of the agreement and the speed at which oil shipments can resume through the Strait of Hormuz. For now, the world breathes a sigh of relief as the spectre of a prolonged Middle East war retreats, and the flow of oil begins to return to normal.
