Oil Prices Fall 20% on US-Iran Peace Deal

The three-month conflict began on 28 February, when the United States and Israel attacked Iran. Iran then threatened to attack ships using the Strait of Hormuz, the narrow waterway carrying about a fifth of the world's oil and LNG (liquefied natural gas). The strait has been largely closed since, briefly pushing Brent to $120 a barrel from around $70 before the war. Tensions remain high: BBC reported a fresh American strike this week on the Iranian port of Bandar Abbas. President Donald Trump said he would meet his advisers to make a final decision on the deal.

Despite the rally, gasoline is still nearly 50% above pre-war levels, and oil executives warn supplies remain very tight. ExxonMobil senior vice president Neil Chapman said inventories were near "unheard-of" lows and could push crude above $150 a barrel within weeks. That would mean about $9-a-gallon gasoline in California. Chevron CEO Mike Wirth told Bloomberg it could take "weeks and weeks" to clear sea mines and move about 2,000 stranded ships out of the strait. Analysts say it may take six to eight weeks for prices to stabilise after fighting ends.