US and Iran pact ends war, clears Strait of Hormuz

The United States and Iran signed an agreement on June 18 aimed at ending a war that began in late February, a conflict that severely disrupted global energy markets and drove up costs for consumers worldwide. The deal is expected to lead to the reopening of the Strait of Hormuz, a critical shipping corridor that had been effectively closed, trapping significant volumes of oil and natural gas.

The conflict, which escalated following U.S. and Israeli strikes, caused immediate spikes in energy prices. Approximately 20% of the world's oil and a substantial portion of global liquefied natural gas (LNG) supply transit through the narrow Strait. The closure led to lost production and transport, with at least one billion barrels of crude oil and refined products affected. This triggered a sharp rise in motor fuel, heating, and jet fuel costs internationally.

In recent weeks, optimism over a potential peace deal had already begun to ease some prices from their peaks. Following the announcement of the framework agreement, benchmark Brent crude oil prices fell. The deal itself defers negotiations on some of the most contentious issues, including Iran's nuclear program, for 60 days.