Crude oil futures declined by more than 4 per cent on Monday morning after US President Donald Trump announced a peace deal with Iran, a move that promises to reopen the Strait of Hormuz and remove a key geopolitical risk premium from oil markets, according to The Hindu BusinessLine.
Price Movements
At 10.04 am on Monday, August Brent oil futures on the Intercontinental Exchange (ICE) stood at $83.27 per barrel, down 4.65 per cent from the previous close, as per the report. July West Texas Intermediate (WTI) crude futures on the New York Mercantile Exchange (NYMEX) were at $80.55 per barrel, down 5.10 per cent.
On the Multi Commodity Exchange (MCX) in India, June crude futures traded at ₹7,632 per barrel, down 5.46 per cent from the previous close of ₹8,073, while July futures were at ₹7,546, down 5.30 per cent from ₹7,968.
| Contract | Exchange | Price | Change (%) |
|---|---|---|---|
| August Brent | ICE | $83.27 | -4.65% |
| July WTI | NYMEX | $80.55 | -5.10% |
| June Crude (MCX) | MCX | ₹7,632 | -5.46% |
| July Crude (MCX) | MCX | ₹7,546 | -5.30% |
Peace Deal Announcement
In a post on his social media platform Truth Social, Trump stated: “The Deal with the Islamic Republic of Iran is now complete. 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!”
In a subsequent post, he added: “This Great Deal will bring Peace and Security to the whole Region. Many presidents have tried to make Peace with Iran, and all have failed before me. The Leaders of the Region have, for the first time, found a President who can help them achieve real Peace. With the opening of the Strait upon the signing of the Deal on Friday, for purposes of mine removal, oil will flow on both ends again for the Region, and the World!”
Broader Market Impact
According to a Reuters report cited by The Hindu BusinessLine, Iran’s Deputy Foreign Minister Kazem Gharibabadi said a more expansive peace agreement would be negotiated during a 60-day ceasefire period. The deal immediately removed the threat of supply disruptions through the Strait of Hormuz, a critical chokepoint for global oil shipments.
Other commodities also felt the impact. June natural gas futures on MCX traded at ₹289.90, down 2.29 per cent from the previous close of ₹296.70. On the National Commodities and Derivatives Exchange (NCDEX), June jeera (cumin) contracts rose 1.42 per cent to ₹19,635, while June dhaniya (coriander) futures gained 1.63 per cent to ₹13,094.
The sharp decline in crude prices reflects the unwinding of the geopolitical risk premium that had built up due to tensions in the Middle East. The opening of the Strait of Hormuz and removal of the US naval blockade signal increased supply availability, which may keep prices under pressure in the near term. Market participants will be closely watching the 60-day ceasefire period for progress on a broader peace agreement that could further reshape oil market dynamics.
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