Oil Slumps 3% as Trump Says Iran Deal Reopens Hormuz

Oil dropped after President Donald Trump said a deal with Iran was complete and the Strait of Hormuz would reopen. Brent crude oil fell more than 3% toward $84 a barrel. West Texas Intermediate traded near $81. Trump posted he was authorizing the “toll free opening” of Hormuz and ending a blockade of Iran-linked vessels. “Ships of the World, start your engines,” he wrote. “Let the oil flow!”

Pakistani Prime Minister Shehbaz Sharif said the agreement would be signed in Switzerland on June 19. Iran Deputy Foreign Minister Kazem Gharibabadi confirmed the deal and said the text of the memorandum would be published after the signing. The agreement includes an end to military operations in Lebanon, a key sticking point for Iran.

The Strait of Hormuz carried roughly a fifth of global oil flows before the conflict began in late February, when the US and Israel attacked Iran to curb its nuclear program. Tehran shut the chokepoint and struck across the Persian Gulf. US forces imposed their own blockade of Iran-linked vessels. Prices spiked at first. Over recent weeks, they drifted lower. Signals of a deal mounted during that period. Some crude flows via the strait had already resumed. Developed economies tapped emergency crude reserves. China, a big importer, scaled back imports.