Brent crude futures for August tumbled 5.47%, or about $4.77, to $82.56 a barrel on Monday, slipping to a more than three-month low as U.S. President Donald Trump announced a peace deal with Iran that he said would reopen the Strait of Hormuz. U.S. West Texas Intermediate (WTI) fell about 6.1% to $79.71 a barrel in the same session. The agreement ends more than 100 days of hostilities in West Asia that had effectively closed the waterway since 28 February, when the United States and Israel launched an air war against Iran.
Pakistan, the mediator, said the memorandum of understanding would be formally signed in Geneva on Friday (June 19), with U.S. Vice-President JD Vance and Iranian negotiator Mohammad-Bagher Ghalibaf leading the ceremony. Global equity markets joined the relief rally: Japan’s Nikkei 225 closed 5% higher, South Korea’s Kospi ended 5.2% up, the S&P 500 rose 1.6%, and the Nasdaq added 3%.
A Three-Month Low in One Trading Day
Brent settled at $83.17 a barrel, down 4.7% on the day, and WTI at $80.75, down 4.8%, per NBC News, their lowest closes since the first week of March, days after the war with Iran was launched. The drop was the immediate market reaction to Trump’s late Sunday announcement, with Brent earlier touching $82.56 intraday before recovering slightly. Crude had already fallen more than 6% over the prior week in anticipation of an agreement, leaving Asian markets open the trading week to a broad relief rally.
Brent was trading at around $70 a barrel before the conflict started and peaked at about $120 a barrel during the war, the BBC reported. The 100-plus days of conflict reshaped global energy trade through the chokepoint that handles about a fifth of the world’s oil and LNG. Iran’s playbook in the 2026 crisis echoes its 1988 Tanker War moves (Iran’s 1988 naval playbook and the 2026 crisis). U.S. retail gasoline at the pump remains elevated at $4.07 a gallon, 36% higher than on 28 February, and the U.S. Strategic Petroleum Reserve has dropped to its lowest level since 1983.
What the MOU Actually Says
Trump declared the deal ‘complete’ on his Truth Social account late on Sunday, authorising the toll-free opening of the strait and the immediate removal of the U.S. naval blockade. The memorandum of understanding (MOU) is set to be formally signed in Geneva on Friday, June 19, with the ceremony to be attended by Vance and Ghalibaf, according to the Geneva signing plan and Iran’s fee dispute. Iran’s deputy foreign minister Kazem Gharibabadi separately confirmed the deal had been finalised in a phone call on Iranian state TV, per the BBC.
Arriving at the Group of Seven (G7) summit in Évian-les-Bains on Monday, Trump told reporters: ‘The deal’s all signed. And the strait is already partially opened.’ He framed the announcement in market terms, saying ‘the oil is plummeting down and the stock market is shooting up like a rocket today.’ Trump also insisted the agreement keeps the strait toll-free, and pinned the deal’s purpose on Iran’s nuclear programme: ‘The main thing is that Iran will not have a nuclear weapon. They fully agreed to that with strong policing powers.’ White House officials said full details of the MOU would be published in the next 24 to 48 hours, with technical discussions led by Vance to begin later this week on the thornier issues.
The current text is preliminary, and the deal extends the current U.S.-Iran ceasefire for 60 days. Pakistan, which has mediated the talks, said the official signing ceremony would take place on 19 June in Switzerland. Trump’s social media announcement capped a frantic weekend of negotiations that lifted the U.S. naval blockade on Iran in exchange for the reopening of the strait.
The deal with the Islamic Republic of Iran is now complete. I hereby fully authorise the toll-free opening of the Strait of Hormuz, and simultaneously herewith, authorise the immediate removal of the United Naval blockade. Ships of the World, start your engines. Let the oil flow!
Donald Trump, Truth Social, June 14, 2026
The Sticking Points Trump Isn’t Talking About
Iranian officials insist that last-minute negotiated changes to the text give Tehran the right to charge fees for maritime services in the strait. Trump rejected that framing at the G7, saying ‘we have an agreement where it’s going to be open, and it’s toll-free.’
Israeli Prime Minister Benjamin Netanyahu distanced himself from the deal in his first public remarks, calling it ‘[Trump’s] decision’ and stressing that ‘We have our own interests.’ National Security Minister Itamar Ben-Gvir went further: ‘Trump’s agreement does not bind us.’ An Israeli drone strike killed one person in southern Lebanon after the deal was announced, the second death since a 60-day ceasefire was agreed there.
Clearing the strait will take months, by several industry estimates. Andrew Lipow of Lipow Oil Associates said mines would first need to be removed from the waterway, a job that could take anywhere from a few weeks to up to six months, per Lipow’s mine clearance estimate for the waterway. Kpler estimates that about 500 large commercial vessels are currently stuck in the region, per the Kpler vessel count and BIMCO’s caution. The firm’s maritime risk manager Dimitris Ampatzidis said even if the strait is reopened, traffic would not normalise immediately and could take ‘roughly 2-3 months.’
BIMCO, the Baltic and International Maritime Council and global shippers’ association, said in a Monday statement that ‘statements by the U.S. and Iran are currently unclear and do not offer sufficient information regarding key aspects such as timings and safe routes.’ The group added: ‘Due to lack of details and a history of overly optimistic reassurances, we believe the security situation for the shipping industry remains volatile.’
India’s Under-Recovery Eases, but Unevenly
India’s under-recovery on petrol and diesel has come down, but LPG cylinders remain exposed to the import bill, Sujata Sharma, Joint-Secretary at the Union Petroleum Ministry, told reporters on Monday. The three fuels tell three different stories about how the strait’s closure passed through to the Indian consumer. State-run oil marketing companies are absorbing the gap on each one.
Under-recovery on LPG cylinders is the laggard, reflecting the import-heavy mix. India imports nearly 88% of its crude oil requirements, and the Strait of Hormuz accounts for about 40% of its crude oil imports, 50% of LNG imports and 90% of LPG imports. The average price at which Indian refiners imported crude rose to $106.23 per barrel in May. India’s oil import bill surged 52.3% to $16.3 billion in April from $10.7 billion a year earlier, per Petroleum Planning and Analysis Cell data.
| Fuel | Under-recovery on June 8 | Under-recovery on June 15 |
|---|---|---|
| Petrol | ₹6 per litre | ₹3 per litre |
| Diesel | ₹30 per litre | ₹27 per litre |
| LPG (domestic cylinder) | not stated | about ₹700 per cylinder |
Why Full Normalisation Will Take Six to Twelve Months
Prashant Vasisht, Senior Vice President and Co-Group Head of Corporate Ratings at ICRA, the Indian credit-rating agency, said the price drop understates the work ahead. In a statement issued after the deal, he said crude prices could take six months to one year to normalise to pre-war levels, given that almost 10-11 million barrels per day of production remains shut in West Asia. Some oil facilities in the region have also suffered damage, he noted, and removing sanctions on Iranian crude would be a separate positive for India, given geographical proximity and longer historical credit terms from Tehran. The production-loss assumptions behind that timeline are detailed in ICRA’s published note on the price outlook.
Brokerage Emkay, in a separate note, said restarting shut oil fields will need additional time and warned that prices could move back towards or above $90 per barrel in the coming weeks. Emkay has maintained its FY27 Brent crude forecast at $90 per barrel, citing elevated prices through the first half of the financial year, and expects prices to correct to around $70 per barrel by the end of FY27. Société Générale’s Kit Juckes noted that Brent is ‘two-thirds of the way back’ to where it started the year, but the forward curve suggests the market is concerned that getting supplies back to pre-war levels will take a long time.
Brent futures for February 2027 were still trading at about $80 per barrel on Monday, even after the deal was announced. The U.S. Strategic Petroleum Reserve has dropped to its lowest level since 1983, per Energy Department data released Monday. Chevron CEO Mike Wirth said inventories are ‘a lot lower’ than they were and warned that efforts to offset higher oil prices by drawing on strategic reserves could begin to lose impact by July. ING analysts said in a Monday note that ‘Whether that delivers much lower energy prices is highly questionable.’
Beyond the immediate price action, crude prices could take six months to one year to normalise to pre-war levels given that almost 10-11 million barrels per day of production has been shut in West Asia besides which some facilities have suffered damages.
Prashant Vasisht, Senior Vice President and Co-Group Head, Corporate Ratings, ICRA
What the Geneva Signing Has to Settle
The Geneva signing is preliminary, with the agreement extending the current U.S.-Iran ceasefire for 60 days. Technical discussions led by U.S. Vice-President JD Vance are due to begin later this week on the thornier items. White House officials said $0 of unfrozen Iranian assets have been released so far, and any sanctions relief will be tied to ‘Iran meeting their commitments.’
U.S. force posture will not be drawn down at signing: ‘The plan is to keep the current force posture during the … negotiations in force,’ an official said. Iran claims a right to charge fees for maritime services in the strait, a formulation G7 leaders committed to freedom of navigation have firmly opposed. Israel launched strikes in Lebanon after the announcement, drawing concern from European Commission President Ursula von der Leyen, who said ‘There can be no lasting peace whilst Lebanon remains in flames.’ Plans for a Franco-British maritime taskforce to escort shipping through the strait remain in doubt, after Trump rejected the idea and said ‘I don’t think we will need much help’ keeping the waterway open. US officials also said the war had left Iran ‘substantially weakened’ and that the country now had the option to be ‘invited into the world economy with all the prosperity that comes along with it.’
- Removal of the U.S. naval blockade of Iran
- Sanctions relief and unfreezing of Iranian assets ($0 released so far)
- Iran’s nuclear programme commitments and verification
- Iran’s claimed right to charge fees in the Strait of Hormuz (contested)
- Mine clearance and shipping safety verification (weeks to 6 months, per industry)
- Status of forces in Lebanon and the 60-day ceasefire
Frequently Asked Questions
How much did oil fall on the US-Iran deal?
Brent crude futures for August fell 5.47%, or about $4.77, to $82.56 a barrel on Monday. U.S. West Texas Intermediate dropped about 6.1% to $79.71 a barrel, with the two benchmarks settling at their lowest closes since the first week of March.
When is the deal being signed?
Pakistan, which has been mediating the US-Iran talks, said the deal will be signed in Geneva on June 19, with the agreement extending the current ceasefire for 60 days. U.S. Vice-President JD Vance and Iranian negotiator Mohammad-Bagher Ghalibaf are set to lead the ceremony, per The Guardian. White House officials said full MOU details would be published in the next 24 to 48 hours, with technical discussions led by Vance to begin later this week.
Will oil prices return to pre-war levels?
Not quickly. ICRA’s Prashant Vasisht said crude prices could take six months to one year to normalise to pre-war levels, given that almost 10-11 million barrels per day of production remains shut in West Asia and some oil facilities have suffered damage. Brokerage Emkay forecast Brent at $90 per barrel for FY27 and around $70 by the end of FY27.
What does the deal mean for Indian fuel prices?
India’s under-recovery has narrowed on petrol and diesel, with petrol dropping to ₹3 a litre from ₹6 and diesel to ₹27 a litre from ₹30, Petroleum Ministry Joint-Secretary Sujata Sharma said Monday. Domestic LPG cylinders are still absorbing about ₹700 each, with 90% of India’s LPG imports routed through the strait.
Why are G7 leaders cautious about the deal?
Iran claims a right to charge fees for maritime services in the strait, which Trump denies (‘toll-free’). Israel has launched strikes in Lebanon since the announcement, and Israeli ministers publicly said Trump’s agreement ‘does not bind’ them. Global shippers BIMCO said US and Iran statements remain ‘unclear’ on timings and safe routes for the waterway.
