U.S. energy shares fell on Monday as crude prices dropped after Washington and Tehran agreed terms to end their months-long conflict and reopen the Strait of Hormuz, a vital oil transit chokepoint.The
U.S. energy shares fell on Monday as crude prices dropped after Washington and Tehran agreed terms to end their months-long conflict and reopen the Strait of Hormuz, a vital oil transit chokepoint.
The U.S. and Iran will sign a memorandum of understanding in Switzerland on Friday, said the prime minister of Pakistan, which helped mediate talks between the two sides.
U.S. President Donald Trump said on Sunday the Strait of Hormuz, which carries roughly a fifth of global oil consumption, would be open "toll free" and that a U.S. naval blockade of Iranian ports would end.
Brent crude futures fell 5.5% to $82.55 per barrel by 1420 GMT, while the U.S. West Texas Intermediate crude was down 5.8% at $79.96 per barrel.
Energy stocks had surged after the conflict broke, driven by escalating fears of supply disruption through the Strait. The S&P 500 Energy index has gained 23.4% so far this year.
"Markets will price in a large optimism discount that 'normality' is returning, although we would caution that flows are not likely to resume to anywhere near pre-war levels for months, and investors should follow how quickly Gulf producers are able to resume oil production and exports
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