Crude oil prices sank to their lowest levels in months following President Trump’s announcement of an agreement with Iran to reopen the Strait of Hormuz.
Brent crude oil prices dropped 4.8% Monday to $83.17 a barrel, while West Texas Intermediate crude plunged 5.2% to $80.46 a barrel. US oil had briefly dropped below the $80 mark for the first time since March in early trading.
Though still higher than pre-war prices, the crude benchmarks fell to three-month lows after earlier hitting as high as $126 a barrel during the Middle East conflict.
In a Truth Social post Sunday, the president wrote: “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!”
The strait – a vital maritime route in the Persian Gulf for 20% of the world’s oil supplies – is slated to reopen on Friday when a deal is signed in Switzerland, according to officials.
US stocks jumped Monday as traders hoped for a swift end to the world’s worst-ever energy supply disruption, which has raised US gasoline prices above the $4 mark and reheated inflation.
The Dow Jones Industrial Average soared 517 points, or 1%, by approximately 9:45 a.m. ET, while the S&P 500 and Nasdaq rose 1.5% and 2.4%, respectively.