Oil prices fell to a three-week low on Monday after US President Donald Trump announced he had cancelled strikes on Iran and that Middle East allies had outlined a deal to end the conflict, raising hopes that the Strait of Hormuz could reopen.
Brent crude drops sharply
Brent crude oil dropped below 83 US dollars (£61.73) a barrel, down nearly 6%, and at one point hit a low of about 81.50 dollars (£60.61) a barrel – the lowest level in three weeks.
Oil prices have been volatile recently, swinging higher on renewed tensions in the US-Israel war with Iran, then falling as leaders signal a return to peace talks. Late last month, Brent briefly rose above 100 dollars (£74.37) after fresh attacks in the Red Sea threatened to escalate the conflict.
Trump announces peace deal progress
In a social media post on Saturday evening, Trump said Middle East allies had reached the “perimeters” of a deal to end the five-month war. The emerging deal would include the reopening of the Strait of Hormuz and address US concerns about Iran’s nuclear programme.
Iran has repeatedly attacked vessels trying to transit the Strait of Hormuz without its permission as part of the conflict. Before the war effectively cut off most transit routes, about a fifth of the world’s oil and gas flowed through the critical waterway.
