Jun 15, Kathmandu - International media reports indicate that crude oil prices have fallen to their lowest point in three months following news of a potential agreement between the United States and Iran.

On Monday, Brent crude oil prices dropped by $4.33 per barrel, approximately 5%, to $83. Meanwhile, West Texas Intermediate (WTI) also declined by $4.54, or 5.35%, to $80.34 per barrel, according to Reuters.

Both benchmarks reached their lowest levels since March 10, with oil prices having fallen over 3% on Friday as well.

US President Donald Trump and Iranian Deputy Foreign Minister Kazem Gharibabadi announced that preliminary agreements had been reached to end hostilities and reopen the strategic Strait of Hormuz.

Pakistani Prime Minister Shehbaz Sharif stated that the memorandum of understanding (MoU) between the two countries is scheduled to be signed this Friday in Switzerland.

Trump had earlier declared that the Strait of Hormuz would be reopened free of charges and that the US naval blockade on Iranian ports would be lifted.

Meanwhile, Iran’s semi-official Mehr News Agency reported that under the draft agreement, the Strait of Hormuz would be reopened under Iranian management within 30 days.

Energy market analysts suggest that while the deal signals immediate relief, restoring pre-war oil supply levels will take time. PVM Oil Associates analyst Thomas Bargay mentioned that it could take weeks or months for the Strait of Hormuz to resume normal daily shipments of approximately 2 million barrels of oil.

Nearly one-fifth of the world's oil and liquefied natural gas (LNG) supplies transit through the Strait of Hormuz. The blockage of this vital route for over three months has significantly impacted global oil and gas supplies.