(RTTNews) – Oil prices were sharply lower on Thursday amid easing geopolitical tensions after U.S. President Donald Trump and his Iranian counterpart remotely signed a preliminary agreement to end the 110-day conflict.
Brent crude futures fell 2.4 percent to $77.61 a barrel, extending declines toward the lowest levels since early March as the International Energy Agency warned of a potential supply glut and focus shifted to the prospect for a swift reopening of the Strait of Hormuz. WTI crude futures for July delivery were down 2.7 percent at $74.71.
The official text of the memorandum of understanding reached over the weekend has been released, which include the immediate and permanent termination of military operations on all fronts, including in Lebanon, the reopening of the Strait of Hormuz, and the lifting of a U.S. naval blockade against Iran.
Iran has committed to “downblending” its stockpile of highly enriched uranium, with a senior official calling it a “significant concession” by Iran. The sanctions relief is tied to the nuclear settlement.
Iran will receive waivers for crude oil exports, petroleum products and associated banking services immediately upon the signing of the MOU.
Israel was not a party to the negotiations or the MOU. All the technical details will be ironed out in the 60-day negotiating period that commences after the scheduled signing ceremony taking place in Switzerland on Friday.
Trump has threatened to resume attacks and kill Iranian officials if they failed to honor their commitments.
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