Oil Plunges to $80 Per Barrel as US-Iran Peace Deal Lifts Global Markets

Global oil prices fell sharply toward $80 per barrel on Monday while stock markets rallied after the United States and Iran reached a peace agreement aimed at ending months of conflict and reopening the strategic Strait of Hormuz. The development eased concerns over global energy supplies and boosted investor confidence across major financial markets. 

The Strait of Hormuz, which handles around 20 percent of the world’s crude oil shipments, had been severely disrupted during the conflict, causing oil prices to surge above $110 per barrel. Following news of the agreement, crude prices dropped by about five percent, with U.S. benchmark West Texas Intermediate falling to around $80 per barrel and Brent crude declining to about $83 per barrel.  

The peace agreement, which is expected to be formally signed in Switzerland later this week, includes plans to reopen the vital shipping route and restore normal energy flows. Analysts believe the move could help reduce inflationary pressures that had intensified due to rising fuel costs during the conflict.  

Financial markets reacted positively to the news. Major Wall Street indexes opened higher, with technology stocks leading gains. Markets across Asia and Europe also recorded strong advances as investors welcomed the prospect of improved geopolitical stability and lower energy prices.  

Stock exchanges in Tokyo and Seoul posted significant gains, while European markets including Paris and Frankfurt moved higher. London’s FTSE 100, however, lagged behind as declines in energy companies weighed on the index following the drop in oil prices.  

Despite the optimism, analysts cautioned that inflation concerns may not disappear immediately. They noted that restoring shipping operations, clearing mines, and normalising supply chains in the Strait of Hormuz could take several weeks or even months.  

Investors are also closely watching upcoming meetings of major central banks, including the U.S. Federal Reserve and the Bank of England, for signals on future interest rate decisions amid the changing economic outlook.