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EMEA Oil Update: Futures Plunge After Trump Says Iran Deal 'All Signed'

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Crude oil futures dropped sharply in after-hours trading on Monday as markets reacted to progress on a US-Iran agreement and the planned reopening of the Strait of Hormuz, following President Donald Trump's comments that the deal with Tehran was "all signed."

Brent crude futures fell 4.83% to $83.11 per barrel, while Murban crude futures declined 7.48% to $76.81/bbl.

US President Donald Trump said the deal with Iran is "all signed, and the Strait is already partially opened," with the waterway expected to be fully operational by Friday. The official signing of the deal will be held in Switzerland on Friday.

Trump arrived in France on Monday for the annual Group of 7 or G7 Summit.

During a bilateral meeting with French President Emmanuel Macron, Trump pointed to the market reaction to the US-Iran peace framework, saying, "... oil has taken its biggest plunge... we're getting close to the numbers we were before it all started..."

Trump said mine-clearing operations in the Strait of Hormuz are progressing, adding, "We'll have all the mines knocked out" by Friday, while several shipping lanes are already operating.

Traders are preparing for additional supply from tankers stranded in the Persian Gulf, but the extent of further price declines will depend on inventory rebuilding, production restarts, demand trends and the speed at which export flows normalize, according to Saxo Bank.

Francis Osborne, head of oil analytics at Argus Media, said the reopening of the Strait of Hormuz would not immediately restore commodity flows because shipowners, insurers and producers are likely to wait for evidence of sustained safe transits before fully returning to the region.

Osborne said logistical challenges, including repositioning vessels and crews and restoring damaged export infrastructure, could slow the recovery process, while Argus Consulting's Oil Fundamentals Outlook estimates that regional crude production may take four to six months to return to near pre-crisis levels.

Claudio Galimberti, chief economist at Rystad Energy, said the proposed agreement appears more credible than previous diplomatic efforts because it aligns the interests of Washington, Tehran and the global economy, adding that this is "more than another short-lived diplomatic cycle."

Daniel Hynes, senior commodity strategist at ANZ Bank, said further downside in oil prices could depend on the pace at which shipping resumes through the Strait of Hormuz, while shipowners continue to take a cautious approach and wait for clearer signs that trade flows can normalize.

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