Oil prices tumble as US and Iran reach peace deal via Pakistan

Brent crude futures dropped roughly 4% late Sunday, falling below $84 per barrel from above $87 after news broke of the planned agreement between Washington and Tehran. The decline accelerated across Asian and European trading floors as details of the Pakistan-mediated deal circulated among energy traders. Market participants priced in expectations that the accord would restore normal flows through the Strait of Hormuz after months of supply disruptions.

Mediation announcement

Sharif revealed the breakthrough early Monday on the social media platform X, stating that intensive negotiations had produced a framework for lasting peace. "Following intensive talks, we are pleased to announce that the Peace Deal between the United States of America and Islamic Republic of Iran has been REACHED," Sharif said, adding that the official signing ceremony is scheduled for June 19 in Switzerland. He noted that "both sides have declared the immediate and permanent termination of military operations on all fronts, including in Lebanon."

Conflict background

The agreement follows over three months of hostilities that began in late February and have claimed thousands of lives while severely restricting maritime traffic through the vital oil chokepoint. The conflict had drawn in regional actors and raised fears of wider escalation across the Middle East before Islamabad stepped in to facilitate the negotiations. The permanent cessation of military operations includes fronts in Lebanon, where parallel tensions had threatened to expand the war beyond the primary US-Iran confrontation.