Oil prices fell sharply to their lowest levels in months on renewed expectations of a breakthrough between the United States and Iran, after U.S. President Donald Trump indicated that a deal with Tehran had been finalized.
Benchmark crude prices dropped significantly, with West Texas Intermediate (WTI) crude declining 4.74 per cent to USD 80.86 per barrel, while Brent crude slipped 3.98 per cent to USD 83.85 per barrel.
In a series of Truth Social posts, Trump claimed that an agreement with Iran is now complete, describing it as a “historic” development expected to bring stability to the region. He also stated that authorization had been granted to reopen the Strait of Hormuz without restrictions and that naval blockades would be lifted immediately. “World’s ships, start your engines and let the oil flow,” he said, signaling a dramatic shift in geopolitical dynamics that has weighed heavily on crude prices.
The Strait of Hormuz, a crucial global oil transit chokepoint, has long been at the center of tensions between Iran and Western powers. Any move toward reopening and securing the route is widely seen as a major factor that could ease supply disruptions and increase market availability, explaining the swift decline in prices. Pakistan’s Prime Minister also indicated that the official signing ceremony is expected to take place on June 19 in Switzerland.
The developments have rippled across broader financial markets. U.S. equity futures signaled strong gains, with Dow futures rising 400 points, Nasdaq futures up 485 points, and S&P 500 futures advancing by 75 points. The upbeat sentiment follows a positive close on Wall Street, where the Dow Jones Industrial Average climbed 353 points, or 0.7 per cent, marking its second consecutive day of gains. The Nasdaq and S&P 500 also ended higher, up 0.3 per cent and 0.5 per cent, respectively.
Asian markets appeared poised to follow suit, buoyed by the improving geopolitical outlook. Japan’s Nikkei index surged more than 5 per cent, extending its rally for a third straight session, while South Korea’s Kospi climbed 5.75 per cent, also marking its third consecutive day of gains.
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