Oil slides as US and Iran sign interim peace deal
Oil prices have plunged further after the presidents of US and Iran signed an interim agreement to end the conflict in the Middle East.
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Video footage posted by French President Emmanuel Macron on social media platform X shows US President Donald Trump signing the deal shortly before a state dinner at the Palace of Versailles.
“It is an important step in the right direction for our compatriots that will soon enable a decrease in energy prices,” the French President said.
The 14-point agreement will extend the US-Iran ceasefire that was announced in April by another 60-day period. The deal includes an immediate end to the Middle East war, as well as the full reopening of the Strait of Hormuz without toll, Reuters reported.
Another formal signing ceremony is planned to take place on Friday in Switzerland, The White House said earlier. Text of the agreement is yet to be formally released by the US.
“ICE Brent fell to its lowest since early March,” following the signing, according to ING Bank’s analysts. “The move [decline in Brent’s price] follows a fast-tracked US-Iran peace agreement, with terms effective immediately,” they said.
The US will lift its blockade of Iranian ports and the strait, Trump said earlier. Washington will also waive some sanctions on Iran, immediately allowing Iran to sell its oil freely to the global oil market.
In return, Iran has agreed to not to build nuclear weapons nor to add to its stockpile of enriched uranium. The interim deal will allow the International Atomic Energy Agency (IAEA) to monitor the “downblending” of that uranium in Iran.
The US will unfreeze Tehran’s assets, and invest $300 billion for Iran's post-war reconstruction, Reuters reported. Hostilities are expected to completely cease in Lebanon.
Following the announcement of the deal, at least three Iranian crude oil tankers have exited the Strait of Hormuz, crossing the US blockade, tanker-tracking firm TankerTrackers.com reported.
According to AIS data, at least two National Iranian Tanker Company (NITC) supertankers, DIONA and HERO2, have exited the blockade, carrying a combined total of 3.8 million bbls of Iranian crude oil, marking Iran’s first crude oil exports in two months, the report added.
However, Trump has threatened to resume attacks, if Iran fails to honour the deal, Reuters reported.
The US and Israel jointly launched the war on Iran on 28 February, quickly spiking energy prices and driving Brent crude’s price above $120/bbl.
“Uncertainty remains about how quickly flows can normalise, with ramp-up timelines dependent on operational, logistical and sanction-related adjustments,” ING Bank’s analysts added.
By Aparupa Mazumder
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