Oil prices fall as US-Iran framework deal eases market fears

Oil prices fell sharply and global stock markets climbed after the United States and Iran announced a framework agreement aimed at ending the war, with President Donald Trump saying it would include the reopening of the key Strait of Hormuz shipping route.

Brent crude, the global oil benchmark, dropped 4.7% to $83.24 (£61.94) per barrel, while equities in Asia and Europe rallied strongly following news of the deal, Caliber.Az reports, citing the BBC.

Pakistan, which has been mediating the agreement, said an official signing ceremony is scheduled for June 19 in Switzerland.

Iranian Deputy Foreign Minister Kazem Gharibabadi confirmed in a state TV interview that a deal with the United States had been finalized, while Trump posted on social media: “let the oil flow!”.

However, analysts warned that uncertainty remains over the details of the agreement. Vandana Hari of Vanda Insights said the lack of clarity could “inject unease and uncertainty into the market” and may lead to continued volatility in oil trading in the coming week.

The Strait of Hormuz has been largely disrupted since the US and Israel launched strikes on Iran in late February. During the conflict, Tehran threatened vessels using the strategic waterway, which normally carries around 20% of global oil and liquefied natural gas supplies.

Energy markets have experienced significant swings in recent months, with Brent crude rising from around $70 per barrel before the conflict to a peak of roughly $120 during the war.

Energy analysts cautioned that normal oil flows through the Strait are unlikely to resume immediately. Andrew Lipow of Lipow Oil Associates said mines in the waterway would need to be cleared first, a process that could take weeks or even months.

He added that a backlog of tankers and disrupted logistics could delay a full return to normal operations for an extended period.

Retired US Navy Rear Admiral Mark Montgomery said the recovery would not happen quickly, estimating it could take around a month to 45 days for shipping and oil flows to stabilize fully.

By Bakhtiyar Abbasov