WTI Falls 4 Percent as US and Iran Agree to Reopen Strait of Hormuz After 100-Day Closure

WTI crude fell 4.09% to $81.41 per barrel on Monday, according to Yahoo Finance data at 3:57 PM EDT. Brent crude dropped 4.17% to $83.69 per barrel at the same time. Both declines followed a joint announcement by the United States and Iran of a ceasefire framework to reopen the Strait of Hormuz.

Deal Framework and Timeline

President Trump announced the agreement on Sunday via social media. Pakistan and Qatar served as mediators for the talks. Iranian Deputy Foreign Minister Kazem Gharibabadi confirmed a memorandum had been finalized, according to Mehr News Agency. A signing ceremony is planned for Friday in Switzerland.

Under the framework, Iran will observe a 60-day ceasefire and commit to forgoing nuclear weapons production. Washington agreed to suspend oil sanctions and release $24 billion in frozen Iranian funds, with $12 billion available before formal nuclear negotiations begin. Iran may resume crude oil exports during the ceasefire period. The Strait had been closed for more than 100 days before Monday announcement.

Shipping Resumes Cautiously

Despite the announcement, major shipping companies did not immediately resume Strait transits. The LNG carrier Disha became the first vessel to clear the Strait on Monday morning. Loaded at Qatar Ras Laffan terminal in early March, the Disha is bound for India with an LNG cargo. Mitsui O.S.K. Lines stated it would resume navigation only once safety has been fully confirmed.

Traders cited mine-clearing requirements as a condition before normal commercial traffic could resume. Oil futures had trended downward for weeks as the market priced in a deal. Monday decline formalized that discount after the official announcement.

LNG Market: An Estimated 20 Percent of Global Supply Disrupted

The Strait closure blocked an estimated 20% of global LNG supply, according to energy analysts. Qatar routes all of its LNG exports through the Strait and faced a total export blockage. Spot LNG prices in Asia briefly surpassed $20 per MMBtu during the disruption. European TTF Natural Gas futures fell 6% on Monday to EUR 43.60 per MWh, their lowest level in five weeks.

Henry Hub natural gas rose 1.22% to $3.158 per MMBtu on Monday, per OilPrice.com, moving counter to the broader energy sell-off. Energy analysts estimated that restarting LNG production and clearing trapped vessels from the Strait could take up to six weeks. European energy prices remain roughly 50% above pre-conflict levels despite Monday decline. Seasonal storage refilling in Europe is expected to sustain near-term gas demand through summer.

Analyst Forecasts: Downside Risk if Ceasefire Collapses

Jorge Leon, senior vice president and head of geopolitical analysis at Rystad Energy, warned that resumed conflict could push crude prices to $150 per barrel. ExxonMobil Senior Vice President Neil Chapman reinforced that outlook at the Bernstein 42nd Annual Strategic Decisions Conference in May 2026. Chapman cited model outputs placing dated Brent at $150 to $160 per barrel if supply disruptions continued with global inventories at historically low levels. JP Morgan noted that lower crude prices could support global equity markets and enable central bank rate cuts.