US President Donald Trump’s announcement of a peace deal with Iran to reopen the Strait of Hormuz has resonated across global markets, with crude oil prices slipping by at least 4 per cent to their lowest level since March.
The war in West Asia, which broke out on February 28, had disrupted international oil supplies, with Iran effectively closing the strategic waterway. This sent global markets into turmoil and pushed inflation higher in several countries.
On Monday, Brent crude futures fell by $3.58, or 4.10 per cent, to $83.75 a barrel by 0004 GMT, while US West Texas Intermediate stood at $80.87, down $4.01, or 4.72 per cent. Both contracts had already dropped more than 3 per cent on Friday.
According to a Reuters report, the world had lost millions of barrels of oil and gas supply since the war led to the closure of the Strait of Hormuz, a chokepoint for about one-fifth of global oil and liquefied natural gas shipments, for more than three months.
On Sunday, Trump said in a Truth Social post that a peace deal had been reached between Washington and Tehran and declared the reopening of the Strait of Hormuz.
He also ordered the immediate removal of the US naval blockade in the strategically important waterway, a move he said would restore the free flow of global energy supplies.
“I hereby fully authorize the toll-free opening of the Strait of Hormuz and, simultaneously herewith, authorize the immediate removal of the United States naval blockade. Ships of the world, start your engines. Let the oil flow!” Trump said.
Disruptions in the Strait of Hormuz had triggered sharp swings in oil prices and raised fears of a prolonged supply shock. India also felt the impact, with oil marketing companies raising prices of petrol, diesel, and LPG multiple times in recent weeks.
Experts believe that lower crude prices could directly benefit India by reducing import costs, easing inflationary pressure, and improving the broader macroeconomic outlook.
