Original Futures: US-Iran agreement triggered a sharp drop on Monday, and the decline continued on Tuesday.

From a news perspective, the core driving factor behind the sharp drop in oil prices on Monday was the historic breakthrough in the memorandum of understanding between the US and Iran. On Tuesday, crude oil continued to fall. President Trump announced that the US had reached an agreement with Iran to end the war, leading the market to expect the reopening of the Strait of Hormuz. This quickly eliminated the significant geopolitical risk premium that had been factored into oil prices. The strait is a critical shipping channel that typically handles about one-fifth of global oil supply on a daily basis, with approximately 14 million barrels per day of production capacity forced to shut down during periods of conflict. Although a preliminary agreement has been reached, the full restoration of oil supply will still take time and there is uncertainty. Therefore, it is recommended to hold short positions in trading.