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Crude Oil Prices Plunge as U.S., Iran Reach Initial Deal to End War

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Crude oil prices plummeted on Monday after the U.S. and Iran reached a preliminary deal to end the war and reopen the Strait of Hormuz to shipping.

Brent crude at last look dropped 5.2% to US$82.76/barrel and West Texas Intermediate crude fell 5.6% to $80.09/barrel.

The U.S. and Iran will sign a memorandum of understanding in Switzerland on Friday, with U.S. President Donald Trump saying the strait would be open "toll free" and a U.S. naval blockade of Iranian ports would end, Reuters said in a Monday report.

Investors are monitoring how quickly Middle Eastern producers can resume oil production and exports and whether more ships will enter the region, the report said.

"It will take time for oil to approach the pre-crisis level of 20 million barrels per day sailing through this chokepoint. Estimates of the full resumption of traffic vary from weeks to months," Reuters quoted Tamas Varga, analyst at PVM Oil Associates, as saying.

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