Crude Oil prices plunge nearly 5 per cent after Trump declares Iran deal complete, orders Hormuz reopening
Trump's announcement marked what he described as a breakthrough after months of conflict that rattled global energy markets and raised fears of a wider regional war.
Crude Oil prices plunge nearly 5 per cent after Trump declares Iran deal complete, orders Hormuz reopening(Photo Credit: IANS)
Washington: Oil prices experienced a substantial decline of nearly 5 per cent on Monday following US President Donald Trump's announcement that the United States and Iran had completed a peace deal. Trump even ordered that the Strait of Hormuz be reopened and the removal of the US naval blockade. Trump's announcement marked what he described as a breakthrough after months of conflict that rattled global energy markets and raised fears of a wider regional war. This will ultimately allow for resumption of trade through the Strait of Hormuz, thereby mitigating fears that global energy supplies could be interrupted.
Why did crude oil prices plunge nearly 5 per cent after Trump's announcement?
Brent dipped more than 3.5% in its early trade and dropped beneath $85 a barrel, while West Texas Intermediate (WTI or US oil) experienced similar losses as it fell almost 5% and almost reached $80 a barrel during the same time period.
In a post on the Truth Social platform, the US President said, "The Deal with the Islamic Republic of Iran is now complete. Congratulations to all! 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!"
How important is the Strait of Hormuz to the world's oil supply?
The Strait of Hormuz, one of the world's most critical energy chokepoints, handles nearly 20 per cent of global petroleum liquids and about a fifth of global LNG shipments. About 2.5-2.7 million barrels per day, or roughly 50 per cent of India's crude imports, transit through the route, largely sourced from Iraq, Saudi Arabia, the UAE and Kuwait.
The announcement came as international attention remained focused on the narrow waterway through which a substantial portion of the world's seaborne oil trade passes. The Strait of Hormuz has been at the centre of tensions between Washington and Tehran for months, with disruptions to shipping contributing to volatility in global energy prices.
Also Read: 'A wall to no nuclear weapon': Trump says US-Iran peace deal to be signed today, Strait of Hormuz to
What happened on February 28?
The US and Israel launched attacks on Iran on February 28 that saw Tehran lose several of its top leadership, including the Supreme Leader Ayatollah Ali Khamemei, Secretary of the Supreme National Security Council Ali Larijani, Islamic Revolutionary Guard Corps Commander Mohammad Pakpour, Defence Minister Aziz Nasirzadeh among others. Khamenei's son, Mojtaba, is now the supreme leader, but has not been seen in public since the war began.
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