Brent Crude Oil Price Crashes Below $85 Per Barrel After Donald Trump Announces Iran-US Peace Deal

Oil prices dropped sharply after US President Donald Trump said an Iran agreement was "complete". He also announced the "immediate toll-free reopening of the Strait of Hormuz". The waterway remains vital for world energy trade. The statement quickly eased fears over supply risks, drawing close attention from global markets.

Brent crude fell 3.9 per cent to $84 a barrel on Sunday. US crude also declined 4.8 per cent, reaching nearly $81 a barrel. These falls extended Friday's losses. Brent had dropped 3.4 per cent then, while US crude had lost 3.2 per cent.

Oil prices react to Strait of Hormuz reopening

The Strait of Hormuz carries a major share of global oil shipments. It had largely stayed shut since fighting began in late February. The closure raised concern across energy markets. An Iranian lawmaker said some commercial ships had paid about $2 million on average to pass through.

Market watchers had warned of steep price gains if the route stayed blocked. Some analysts expected crude to move into the mid-to-high $100 range. Petrol prices in the United States were also at risk. Rapidan Energy President Bob McNally told ABC's This Week prices could have touched $5 a gallon.

Oil prices ease after Trump announces Iran deal

Trump confirmed the development on Truth Social after talks with Tehran. The announcement said the deal had been completed. It also cleared the way for maritime limits to be removed. The message was closely watched because shipping curbs had affected a key supply route.

"The Deal with the Islamic Republic of Iran is now complete," Trump wrote.

"Congratulations to all! I hereby fully authorise the toll free opening of the Strait of Hormuz, and, simultaneously herewith, authorise the immediate removal of the United States Naval blockade."

The president added, "Ships of the World, start your engines. Let the oil flow!"

The announcement came only hours before a UFC event at the White House. The event marked Trump's 80th birthday. However, the market reaction centred on the Strait of Hormuz. Traders focused on the possible return of smoother oil movement through the waterway.

Oil prices influenced by diplomatic talks

The agreement followed several days of diplomatic efforts by different mediators. Pakistan was among those involved in the process. Prime Minister Shehbaz Sharif said the peace agreement came after detailed negotiations between Washington and Tehran. His remarks added further weight to the reported settlement.

Sharif said both sides had accepted an immediate and permanent end to military operations. He said this covered all fronts, including Lebanon. According to Sharif, the agreement would be formally signed in Switzerland on June 19. That detail gave markets a clear timeline.