Global oil prices fell sharply on Monday after Pakistan announced that it had successfully mediated a peace agreement between the United States and Iran a short while ago.
Brent crude dropped around 4 percent to $83.81 per barrel in early Asian trading, while US benchmark crude fell nearly 5 percent to $80 as markets reacted positively to news of the breakthrough.
Prime Minister Shehbaz Sharif announced that a peace deal between Washington and Tehran had been reached following intensive negotiations led by Pakistan and regional partners.
According to Pakistan’s prime minister, both sides have agreed to an immediate and permanent cessation of military operations across all fronts, including Lebanon. The official signing ceremony is scheduled to take place in Switzerland on June 19.
Shehbaz thanked the governments of the United States and Iran for choosing diplomacy and acknowledged the support of Qatar, Saudi Arabia and Türkiye in helping secure the agreement.
Iranian Deputy Foreign Minister Kazem Gharibabadi also confirmed that an agreement with the United States had been finalized, while US President Donald Trump welcomed the development by posting, “Let the oil flow!”
The announcement has raised expectations that the Strait of Hormuz, one of the world’s most important energy corridors, will reopen after months of disruption. Roughly one-fifth of global oil and liquefied natural gas shipments normally pass through the narrow waterway.
The route had effectively been shut down following the escalation of hostilities by US and Israel against Iran. This triggered fears of prolonged supply disruptions and pushing oil prices significantly higher.
Despite the optimism, uncertainty remains until details of the agreement become public. This analyst still has questions surrounding implementation and security arrangements that could keep oil markets volatile in the coming days. “But peace comes first; we need a break,” he added.
The pro-Israel US Senator Lindsey Graham also welcomed reports that an understanding had been reached to reopen the Strait of Hormuz but said Congress would closely review any final agreement involving Iran’s nuclear program.
The peace deal doesn’t mention anything about Iran’s nuclear program.
Still, shipping through the Strait of Hormuz may not immediately return to normal levels and would require security clearances, possible mine removal operations, and a backlog of oil tankers waiting to transit the route.
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Would not e possible if Adiyala was not locked. For worlds lasting peace, keep it locked Chachu