International oil prices plummeted by over 4%! The US and Iran have reached a peace agreement, and the Strait of Hormuz is expected to reopen on June 19th.

After the United States and Iran reached a peace agreement aimed at ending the Middle East war and potentially reopening the vital global energy transport artery of the Strait of Hormuz, international oil prices plummeted. As of the time of writing, Brent crude futures fell by nearly 4% to $83.90 per barrel; WTI crude futures fell by over 4% to $81.19 per barrel. European natural gas futures prices also saw a significant drop, with a decrease of up to 5.8%. President Trump of the United States posted on social media platform that the agreement between the U.S. and Iran is "now complete," and he has "authorized" the "free opening" of the Strait of Hormuz as well as the immediate lifting of relevant blockades by the U.S. Navy; the Strait of Hormuz will be "reopened" on the same day as the official signing of the agreement on June 19. Trump said, "Ships of all countries, start your engines. Let the oil flow!" Meanwhile, Pakistani Prime Minister Shahbaz Sherif stated after intensive negotiations, the United States and Iran have reached a peace agreement. Both sides announced the immediate and permanent cessation of all military operations on all fronts, including in Lebanon. The official signing ceremony will take place in Switzerland on June 19. U.S. Vice President JD Vance stated that he "will certainly" plan to attend the signing ceremony, and Trump may also attend in person. Iran's Deputy Foreign Minister Ghalibabadi confirmed that the text of the memorandum of understanding between Iran and the U.S. has been finalized, and the formal signing ceremony of the "Istanbul Memorandum" will take place in Switzerland on June 19. Ghalibabadi stated that as of early morning on June 15 local time, two things will immediately occur: first, an immediate and permanent end to all hostilities on all fronts, including the Lebanon front; second, the U.S. will lift and terminate its naval blockade against Iran. Iran's commitments will become effective after the formal signing on Friday. Ghalibabadi mentioned that after the ceasefire, the U.S. lifting the naval blockade, and Iran's frozen assets being unfrozen, both sides will enter a 60-day negotiation period to discuss the final agreement. If the "other party breaches the agreement," Iran will take corresponding measures, with the Iranian armed forces "continuing to hold the trigger". During the 60-day negotiation period for the final agreement, both sides will negotiate on nuclear issues, the U.S. lifting sanctions on Iran, rebuilding Iran's economic mechanisms, and verification mechanisms for commitments by all parties. Ghalibabadi also confirmed that the statement regarding the agreement with the U.S. will soon be released by Iran's Supreme National Security Council. Since the outbreak of the Middle East war at the end of February this year, the global energy market has been deeply affected. At that time, the U.S. and Israel launched attacks on Iran. In response, Iran struck the entire Persian Gulf region and closed the Strait of Hormuz. During peacetime, the strait carries about one-fifth of the world's crude oil transportation volume. Additionally, the U.S. navy imposed blockades on ships associated with Iran. After the initial surge in oil prices at the beginning of the conflict, oil prices have continued to fall in recent weeks, as Washington and Tehran have continuously signaled that they are close to reaching an agreement, and there have been signs of a resumption of crude oil flow through the Strait of Hormuz. In addition, developed economies have used emergency crude oil reserves, while some major importing countries have reduced the scale of crude oil imports. Despite the significant benefits that the agreement will bring to energy-producing countries in the Persian Gulf region, the global shipping industry, and consumers, there are still many obstacles to be overcome before the full reopening of the vital shipping artery of the Strait of Hormuz. These include clearing anti-ship mines, as well as clarifying whether Iran wishes to impose stricter controls on passing vessels. It is worth mentioning that if the situation in the Middle East further eases and the Strait of Hormuz can smoothly reopen, energy prices are expected to continue to fall. Even if the war ends in the short term, the earlier rise in energy, transportation, and raw material costs may continue to be transmitted to end consumers through the supply chain, and in the coming months, U.S. consumers may still face pressure of rising prices for goods and services, but the fall in energy prices is expected to cool inflation expectations and expectations for a rate hike by the Federal Reserve.