WANA (Jun 15) – Global oil prices plunged on Monday after Iran and the United States announced a framework agreement aimed at ending hostilities across all fronts, pushing crude prices to their lowest levels since the early days of the U.S.-Israeli military campaign.

 

According to market data, Brent crude futures fell by $4.08, or 4.7%, to $83.25 per barrel, while U.S. West Texas Intermediate (WTI) crude dropped by $4.35, or 5.1%, to $80.53 per barrel.

 

Both benchmarks reached their lowest levels since March 10 after declining by more than 3% on Friday.

 

Pakistan’s prime minister, whose country has acted as a mediator, said Iran and the United States are expected to sign a memorandum of understanding in Switzerland on Friday. U.S. President Donald Trump said on Sunday that the Strait of Hormuz would remain open and that the U.S. naval blockade of Iranian ports would also come to an end.

 

A Chief Market Analyst at KCM Trade, said geopolitical risks that had supported crude oil prices are now rapidly easing as traders price in the prospect of resumed oil flows.

 

The global market has lost millions of barrels of oil and natural gas over the past three months following the closure of the Strait of Hormuz—through which roughly one-fifth of the world’s oil and LNG supplies transit—and the deterioration of shipping security after the U.S.-Israeli attacks on Iran.

 

Investors are also closely watching how quickly Middle Eastern producers can restore oil production and exports after war-related disruptions, and whether more vessels will return to the region.

 

In a research note, Vivek Dhar, a commodities strategist at Commonwealth Bank of Australia, said that while uncertainties still pose upside risks to forecasts for Brent crude to reach $80 per barrel by year-end, oil flows through the Strait of Hormuz would only need to recover to 60–70% of pre-war levels for the market to return to expectations of oversupply that existed before the conflict.