Global oil prices fell sharply on Monday after Pakistan announced that it had successfully brokered a peace agreement between the United States and Iran, easing concerns over disruptions to global energy supplies.
Brent crude, the international benchmark for oil prices, dropped 4.8 percent to $83.18 per barrel, while U.S. crude futures declined 5.6 percent to $80.13 per barrel.
Pakistan's Prime Minister, Shehbaz Sharif, said an official signing ceremony for the agreement would take place in Switzerland on June 19. Iran's Deputy Foreign Minister, Kazem Gharibabadi, also confirmed that negotiations with Washington had concluded successfully, while U.S. President Donald Trump welcomed the development, calling for oil shipments to resume.
The agreement is expected to pave the way for the reopening of the Strait of Hormuz, one of the world's most important energy transit routes. The strategic waterway has remained largely closed since the outbreak of hostilities between the United States, Israel, and Iran earlier this year.
Despite the positive market reaction, analysts cautioned that uncertainty remains due to limited information about the deal's provisions. Energy experts also warned that restoring normal shipping operations could take weeks or even months because of security concerns, including the clearance of mines and a backlog of oil tankers waiting to pass through the route.
The Strait of Hormuz handles roughly one-fifth of global oil and liquefied natural gas shipments, making any disruption a major concern for international markets.
Meanwhile, Asian stock markets rallied on news of the agreement. Japan's Nikkei 225 gained more than 5 percent, while South Korea's Kospi index also recorded strong gains as investors welcomed signs of easing tensions in the Middle East.
The development has raised hopes for greater stability in global energy markets after months of volatility driven by the conflict between Washington and Tehran.
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