Oil prices fell sharply after President Donald Trump announced that the U.S. has finalized a deal with Iran to reopen the Strait of Hormuz, a critical passage for global oil shipments. U.S. crude oil futures for July delivery dropped over 5% to $80.25 per barrel, while Brent futures fell approximately 4.26% to $83.31 per barrel, marking their lowest levels since March 10.
Trump stated that the strait would reopen without a toll system and that the U.S. would lift its naval blockade of Iran, allowing oil to flow freely again. This development is significant as about 20% of the world's oil supply transits through Hormuz, and the previous disruptions due to Iranian attacks had caused unprecedented supply issues.
The announcement has also positively impacted U.S. stock futures, with the Dow Jones Industrial Average rising by 342 points, or 0.7%. Asian markets reacted favorably as well, with notable gains in South Korea and Japan.
The CEO of Frontline, an oil tanker company, expressed optimism about a quick resumption of shipping traffic through Hormuz if a credible agreement is reached, indicating a potential recovery in oil supply and market stability