US-Iran peace sends oil tumbling, gold soaring
JAKARTA - World oil prices fell sharply, while gold strengthened after the United States and Iran were said to have reached an agreement to end the conflict. The news paved the way for the reopening of the Strait of Hormuz, an important route for global energy shipments.
As reported by Anadolu Agency quoted Monday, June 15, Brent futures fell from above 87 US dollars per barrel to below 84 US dollars. Brent is the international benchmark price of oil. On a daily basis, the price fell by about 4 percent at the end of Sunday to early Monday.
The Washington-Tehran deal is scheduled to be signed on June 19 in Switzerland, after the conflict lasted more than three months.
Gold prices moved in the opposite direction. Spot gold rose 1.8 percent to $4,297.42 per troy ounce at 0010 GMT, its highest level since June 9. A troy ounce is a common unit of weight used in gold trading.
U.S. gold futures for August delivery also rose 1.9 percent to $4,318.10 per troy ounce. Futures are commodity trading transactions at an agreed-upon price now for delivery in the future.
The rise in gold came after US and Iranian officials said they had reached an agreement to end the conflict. The deal pressured oil prices and eased market concerns about inflation and high interest rates.
Pakistan Prime Minister Shehbaz Sharif announced on Monday that the US and Iran reached an agreement after intensive negotiations. Pakistan was a mediator in the talks.
"After intensive talks, we are pleased to announce that a peaceful agreement between the United States and the Islamic Republic of Iran has been reached," Sharif wrote on the X platform, as quoted by Anadolu Agency.
Sharif said both sides expressed an immediate and permanent cessation of military operations on all fronts, including in Lebanon.
The Strait of Hormuz is an important part of the market reaction. This route is one of the world's main routes for shipping oil and energy. When the area is disrupted, oil prices usually rise quickly because the market is worried that supplies will be stalled.
With news of a peace deal and plans to reopen the Strait of Hormuz, pressure on oil prices eased. Markets are still waiting for the official signing of the deal on June 19 in Switzerland.