Brent oil prices below $80 on US-Iran deal

Oil prices fell to a three-month low on Tuesday on optimism over the expected reopening of the Strait of Hormuz after a peace deal between the United States and Iran.

Brent North Sea crude, the international benchmark, fell 4.0 percent to $79.87 a barrel, falling below $80 for the first time since early March.

The main US oil contract, West Texas Intermediate, fell 4.5 percent to $77.16 a barrel.

US President Donald Trump said the Strait of Hormuz would be “fully open” after Washington and Iran signed their peace deal in Switzerland on Friday.

Iran effectively halted tanker traffic through the vital waterway in retaliation for a US and Israeli attack launched in late February, which halted oil and gas traffic and sent crude prices skyrocketing.

“Traders are pricing the reopening of the Strait of Hormuz as the most immediate and positive outcome of any peace deal,” said David Morrison, senior market analyst at broker Trade Nation.

While Iranian officials have threatened to impose tolls on ships passing through the critical channel, “as far as oil traders are concerned, they see a market that is finally loosening up,” Morrison said.