Oil Falls 2% as US-Iran Deal Reopens Hormuz

The United States and Iran have signed a deal to end the Middle East war, with a ceremony set for Friday in Switzerland that will mark the start of a 60-day negotiation period.

The memorandum of understanding aims to put an end to months of conflict initiated by US-Israeli strikes on Iran in February, which wreaked chaos across the region and rattled the global economy.

Oil prices tumble

Oil prices fell more than two percent on Thursday, extending the losses sustained since news of the deal broke at the weekend.

International benchmark Brent North Sea crude was down 2.1 percent to $77.87 a barrel as of 0525 GMT.

US, Iran confirm signing

US President Donald Trump signed the memorandum of understanding on Wednesday after he attended the G7 summit in France, during a candlelit dinner at the Palace of Versailles, according to a video posted by a Trump aide.

Iranian Foreign Ministry spokesman Esmaeil Baqaei, quoted by the state news agency IRNA, said the document “was finalised with the signatures of the presidents”.

Iran’s chief negotiator and parliament speaker, Mohammad Bagher Ghalibaf, said the deal represented a US “failure”.

‘Immediate’ effect

The memorandum “shall enter into force with immediate effect and as a first step, Islamic Republic of Iran will instantly reopen the Strait of Hormuz and the United States of America will immediately lift the naval blockade”, Pakistan’s Prime Minister Shehbaz Sharif wrote on X.

Sharif also confirmed that Pakistan, with Qatari support, would host a ceremony in Switzerland on Friday to “commemorate this landmark event and commence with the technical level talks”.

Iran to charge ships

Tehran reiterated its plans to charge ships crossing the Strait of Hormuz after the 60-day period stipulated in the document had elapsed.

Iran’s chief negotiator Ghalibaf said in an interview aired on state television that the “Strait of Hormuz will not return to pre-war conditions”, adding: “Iran has the right to sovereignty over the Strait of Hormuz and of course we will receive a fee for services.”