Oil prices fall after Pakistan announces agreement between US and Iran

(Patria) - Oil prices fell in early Asian trade after Pakistan, which mediated the end of the war between the United States and Iran, announced an agreement that President Donald Trump said would lead to the reopening of the key shipping route through the Strait of Hormuz.

Brent crude oil, the global benchmark, was down 3.8% at $84.02 a barrel, while US-traded oil fell 4.1% to $81.40 a barrel, the BBC reported this morning.

Pakistani Prime Minister Shehbaz Sharif said the official signing ceremony will be held on Friday, June 19 in Switzerland.

Trump later posted on social media that "oil will flow."

The strait was closed shortly after the US and Israel launched airstrikes on Iran on February 28.

Tehran threatened to attack ships using the key waterway, through which about twenty percent of the world's oil and liquefied natural gas (LNG) typically passes.

Global energy markets have been highly volatile in recent months, with prices often rising or falling sharply in response to developments in the war between the US and Israel against Iran.

Brent crude oil, which traded at around $70 a barrel before the conflict began, peaked at around $120 during the war.