World News
Crude Futures Fall Over 4% on US-Iran Deal to Reopen Strait of Hormuz
Crude futures plunged on Monday morning after the US and Iran announced a preliminary framework agreement for a peace deal that would allow the reopening of the Strait of Hormuz.
The ICE August Brent contract traded at $83.37/bl as of 4:44 AM in London, down 4.5% from Friday's settlement of $87.33/bl.
“The Deal with the Islamic Republic of Iran is now complete, US President Donald Trump said in a recent social media post.
“Congratulations to all! I hereby fully authorize the toll-free opening of the Strait of Hormuz, and, simultaneously herewith, authorize the immediate removal of the United States Naval blockade.
“Ships of the World, start your engines.
“Let the oil flow!”
Iran's Deputy Foreign Minister Kazem Gharibabadi also confirmed that the text of a memorandum of understanding has been finalised and that a formal signing ceremony is scheduled to take place in Switzerland on Friday.
The agreement would allow shipping traffic through the Strait of Hormuz to resume after more than 100 days of disruption following military action against Iran by the US and Israel in late February.
The full terms of the memorandum have not yet been disclosed; however, details on Iran's nuclear programme and other key issues are expected to become clearer once the document is formally signed on Friday.
"Dozens of ships are positioned near the Strait of Hormuz ready to move if traffic resumes, Daniel Hynes, senior commodity strategist at ANZ Bank, said in a LinkedIn post on Monday.
"Nevertheless, the oil market wouldn’t see any relief on production in the region until empty ships return."
The agreement will be followed by a 60-day period of further negotiations to reach a final deal, according to media reports.
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Singapore | 908.00 | 12.00 | 1291.50 | 37.00 |
| Rotterdam | 728.00 | 36.00 | 1416.50 | 83.50 |
| Houston | 760.00 | 5.50 | 1415.00 | 16.50 |
| Fujairah | 988.00 | 3.50 | 1716.00 | 30.00 |
| Global 20 Ports Average | 894.00 | 9.50 | 1542.00 | 34.00 |
| Global 4 Ports Average | 846.00 | 14.50 | 1460.00 | 42.00 |
| Global Average Bunker Price | 946.00 | 9.00 | 1592.50 | 19.00 |
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