Global oil markets experienced a significant downturn following reports of an agreement between Washington and Tehran, with Brent and West Texas Intermediate (WTI) crude prices falling to their lowest levels in several months. Investors are now closely watching the potential resumption of Gulf oil exports.

Sharp Decline in Oil Prices on Market Opening

Oil prices dropped sharply on the first trading day of the week, reaching their lowest level since March.

Brent crude futures fell by $3.58, or 4.10%, to $83.75 per barrel. Meanwhile, U.S. West Texas Intermediate (WTI) crude declined by $4.00, or 4.72%, settling at $80.87 per barrel. Both benchmarks had already recorded losses of more than 3% the previous Friday.

Political Agreement and Prospects for the Strait of Hormuz

The decline followed statements by Donald Trump and Iran’s Deputy Foreign Minister announcing a preliminary agreement.

Pakistan’s Prime Minister, acting as mediator, stated that a memorandum of understanding is expected to be signed in Switzerland on Friday. Trump said the Strait of Hormuz would reopen “tariff-free” and that the U.S. Navy’s blockade of Iranian ports would end. Iran’s Mehr News Agency also reported that the draft agreement envisions reopening the Strait of Hormuz within 30 days.

War Impact on Global Energy Supplies

Since February, global markets have reportedly lost millions of barrels of oil and gas due to disruptions linked to the closure of the Strait of Hormuz.

Investors are now closely monitoring the pace at which Middle Eastern producers can restore output and exports, particularly after significant damage to energy infrastructure caused by the conflict.

European Position and 60-Day Negotiation Framework

Iran’s Deputy Foreign Minister Kazem Gharibabadi stated that broader negotiations will take place during a 60-day ceasefire period.

Meanwhile, the E4 countries, the United Kingdom, France, Germany, and Italy, have expressed readiness to lift sanctions on Iran in exchange for progress on Tehran’s nuclear program commitments.