Crude Oil Prices Ease Over 2% To $77 Per Barrel Mark As US, Iran Sign Peace MoU

Crude oil prices continued to ease on Thursday as the United States and Iran singed a peace-memoranda resulting in the official end to the 15-week long war.

Global crude oil benchmark Brent Crude declined over 2.26 percent to $77.75 per barrel from Wednesday’s levels.

American crude benchmark WTI Crude also fell 2.72 percent to $74.50 per barrel mark during the Asian trade hours.

Today’s decline in prices is significantly higher than Wednesday’s decline of less than 1 percent. The ease in the commodity came after the peace memoranda was signed between the warring sides.

The strait, which was closed since the start of the war in late February, used to give way to about 20 percent of the world’s oil supply from the Gulf region.

Iran had effectively blocked the waterway soon after the country was attacked by Israel and the US on February 28.

Now that the US and Iran have singed the memoranda and agreed to negotiate a final peace agreement during the 60-day window, the Strait of Hormuz is open for commercial vessels to pass through.

The document titled “Islamabad Memorandum of Understanding between the United States of America and the Islamic Republic of Iran” was singed by the United States President Donald Trump and his Iranian counterpart Masoud Pezeshkian on Wednesday.

The peace MoU says that the US will end its naval blockade of the Iranian ports within 30 days.

The document also ensures that Iran opens the Strait of Hormuz “using its best efforts” to allow safe movement of commercial vessels with zero charge.

The document says that conflict will come to an end on all fronts, including Lebanon. However, Israel had earlier said that US’ negotiations with Iran will not have any impact on its military operation against Hezbollah in Lebanon.

The peace MoU also allows the US and Iran to come to a final peace agreement within 60 days of signing the deal. Though, the 60-day window can be extended if required.