Crude oil prices declined sharply by nearly 5% in early Asian trading on Monday, June 15, following US President Donald Trump’s announcement of a completed peace deal with Iran and the immediate reopening of the Strait of Hormuz, a critical global energy route that previously handled about 20% of global oil flows before the conflict.
Brent crude fell more than 3.5% in early trades, slipping below $85 per barrel, while West Texas Intermediate (WTI) crude dropped as much as 5%, briefly approaching the $80 mark.
However, prices showed signs of partial recovery as official confirmation from Iran on the agreement was still awaited.
In a post on Truth Social, Trump stated that the Strait of Hormuz would reopen immediately following the deal and that the US naval blockade would also be lifted. He added, “Ships of the World, start your engines. Let the oil flow!”
Pakistan Prime Minister Shehbaz Sharif also indicated on X that the agreement is expected to be signed in Switzerland on June 19.
According to Bloomberg, Iran’s deputy foreign minister Kazem Gharibabadi has confirmed the deal signing, although senior Iranian leaders, including the foreign minister and parliament speaker, have yet to issue official statements.
Oil prices declined primarily due to expectations that reopening the Strait of Hormuz would restore normal shipping and allow Asian economies to resume uninterrupted crude imports from the Gulf region.
Additionally, earlier production quota increases announced by the Organization of the Petroleum Exporting Countries (OPEC) for July have added further downward pressure on prices.
The oil market has experienced extreme volatility in recent months, surging to as high as $125 per barrel during the height of the Iran conflict.
However, intermittent ceasefire developments and peace expectations have prevented sustained price spikes.
Overall, easing geopolitical tensions and improving supply outlook have triggered a sharp correction in global crude benchmarks, although uncertainty persists pending formal diplomatic confirmations.
