Oil prices hit three-month low and markets rally amid Iran deal breakthrough

Donald Trump posts ‘Let the oil flow’ as US-Iran peace deal sparks immediate drop for Brent crude

Global oil prices have tumbled to a three-month low and stock markets rallied amid fresh hopes that a US-Iran peace deal could end the greatest energy supply crisis in the history of the market.

The price of Brent crude dropped 5% to below $83 (£62) a barrel as the new trading week began, amid optimism that the strait of Hormuz could reopen shortly and bring a return of Gulf oil exports to the market. Wholesale gas prices fell 6% in Europe.

Trump said on Sunday that a deal was “now complete”, despite recent Israeli airstrikes on Beirut that had threatened to undermine the sensitive talks.

The US president wrote on social media: “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!”

An hour later he clarified that the strait would open after the peace deal was signed on Friday and that “for purposes of mine removal, oil will flow on both ends again for the Region, and the World!”

Many of the details of the agreement are unclear, notably around the exact timing of the reopening of the maritime route, who will oversee safe passage and whether any conditions will be applied. Iranian authorities have said there would be a 60-day negotiating period for a final deal tackling wider issues such as Tehran’s nuclear programme and sanctions relief.

The benchmark international oil price extended the falls recorded on Friday to just over $82 a barrel, its lowest since the early days of the war, on 10 March. Brent crude was just below $73 at the outbreak of the war in late February.