Oil prices drop as U.S. and Iran reach ceasefire agreement to reopen Strait of Hormuz
By
Eric Reguly
Front-window bakery material. Catches the eye, delivers the goods.
Summary
The U.S. and Iran have reached a framework agreement to extend their ceasefire, reopen the Strait of Hormuz, and end the American Navy's blockade of Iranian ports. This development has caused oil prices to drop sharply (Brent crude down over 4% to ~US$83/barrel) and lifted Asian markets. The truce may be temporary as some crucial issues remain unresolved, including the nuclear question. A tentative agreement is expected to be signed in Geneva on Friday.
Key quotes
· 3 pulledThe halt to hostilities sent oil prices down sharply and lifted Asian markets in overnight trading.
While the war's halt may only be temporary – some crucial issues were left open – investors and energy traders clearly took the view that the truce marks a turning point after three months of on-off negotiations.
In early Monday trading, Brent crude, the international benchmark, was down more than 4 per cent to about US$83 a barrel.
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