Global oil prices plummeted nearly 6 percent Monday after President Donald Trump announced a completed peace deal with Iran that includes the reopening of the Strait of Hormuz.
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“The Deal with the Islamic Republic of Iran is now complete,” Trump said in a Truth Social post, Sunday afternoon. “Hormuz will open without a toll system and the U.S. will end its naval blockade of Iran. Ships of the World, start your engines, Let the oil flow!” the president added.
U.S. crude (WTI) dropped below $80 per barrel to roughly $79.90, while Brent crude fell over 5 percent to approximately $82–$83, marking the lowest levels since March.
While Trump emphasized that reopening of the strait would be toll-free, Iran has claimed the toll-free period will last only 60 days.
Vice President JD Vance however told CNBC Monday that the United States expects Hormuz to remain toll-free indefinitely.
“Our expectation is that the strait is going to be opened in a toll-free way for the long term, and that’s the sort of thing that we’re going to figure out in these technical negotiations,” Vance told CNBC’s “Squawk Box” in an interview.
On CBS, Monday morning, Vancealso debunked reports that the U.S. would foot the bill for a “$300 billion reconstruction fund” in Iran.
Vance said that Gulf nations would only fund Iranian reconstruction if Iran upheld its side of the deal.
“I think that one of the things you’re going to see it and people have to be skeptical of this is that the hardliners in the Iranian system will overemphasize the benefits that Iran gets while underemphasizing all the things that they have to concede and all the things they have to provide in order to get these benefits,” he explained.
“So we absolutely are open to the Gulf Coast countries investing in the reconstruction of Iran, but only if Iran ends their nuclear program, ends their enriched stockpile of material, and it’s really open to an inspections and enforcement regime that gives the American people confidence they’re never going to have a nuclear weapon,” the vice president added.
Monday morning, Trump announced that ships were already beginning to move through the strait—”many loaded up with Oil.”
“They are going along the Southern ‘Highway,’ which is totally safe, secure, and pristine,” The president posted on Truth Social. “There are other areas of travel, also!!!”
Pakistani Prime Minister Shehbaz Sharif confirmed that a final, agreed-upon text for a US-Iran peace deal has been reached and military operations have been terminated, ending the over 100 day conflict.
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As part of the deal, a senior Iranian official told Reuters Sunday that the United States had agreed to release $25 billion of frozen Iranian assets.
The Trump administration has previously stressed that any release of Iranian money would only take place once Iran had fulfilled certain conditions under the peace deal.
The deal reportedly requires Tehran to stop producing nuclear weapons, enriching uranium and expanding nuclear facilities.
A US official, also speaking before the announcement, said the agreement would ultimately lead to the dismantling of Iran’s nuclear program, with its stockpile of highly enriched uranium to be destroyed and removed.
Trump has warned he would restart attacks or become the “guardian of the Middle East” if Tehran refused to dismantle its nuclear program.
The formal signing is scheduled for Friday, June 19 in Switzerland and the Strait of Hormuz is set to open fully that same day.
The president commented on the latest developments during a joint press conference French President Emmanuel Macron in Évian-les-Bains, France.
Trump arrived in France Monday morning for the G7 Summit, following a jam-packed weekend celebrating UFC Freedom 250, Flag Day, and his 80th birthday at the White House.
“The Strait is already partially open, as you know they’re doing a little hunting for a couple of mines that they’ve already found. But it’s essentially ships are starting to go out. Now on Friday it’ll be completely open,” the president said during the presser.
“We got along very well with Iran, it’s a different set of leaders. As you know the first set is gone, the second set is gone, and we found the third set to be very smart, strong, very smart, but we ended up making a deal. I felt badly that we had to go back from the attack for too much, and I thought a third, but we made it before that happened.”
He added: “But I think a lot of great things are going to happen in the Middle East right now, and we’re just shooting up like a rocket today, like record kind of numbers, and the oil is taking its biggest plunge.”
The president called the text of the deal “a very powerful document,” contrasting it with former president Barack Obama’s nuclear deal with Iran, which he called “just a terrible document.”
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