Oil prices sink as Trump, Iran sign Hormuz reopening deal

Oil prices tumbled again on Thursday after US President Donald Trump and his Iranian counterpart signed a deal to end their war and reopen the Strait of Hormuz, a critical chokepoint for global crude shipments. The agreement, reached on the sidelines of the G7 summit in Versailles, marks a dramatic de-escalation after more than three months of conflict that had rattled energy markets and fueled a fresh spike in inflation.

The reopening of the Strait of Hormuz removes a major supply risk that had added a significant risk premium to oil prices. The strait handles about a fifth of the world's oil consumption, and its closure had disrupted flows from major producers in the Middle East. With the deal, traders are now pricing in a return of normal supply, pushing crude benchmarks lower. Live fuel prices and charts on NowPrice show how the market is reacting to this geopolitical shift, with Brent and WTI both extending their weekly losses.

However, the downside in oil prices is being tempered by expectations that the US Federal Reserve will hike interest rates before year-end. The Fed's new chair held his first policy meeting and acknowledged that persistently high prices remain a burden for the American people, signaling a hawkish stance. Traders will now watch for further details on the Hormuz reopening timeline and any additional supply moves from OPEC+, as well as upcoming US inventory data to gauge the balance between easing geopolitical risks and tightening monetary policy.