Iran Deal Sends Oil Prices Sharply Lower

Global energy markets opened Monday with a steep drop in oil prices after the agreement between the United States and Iran. A barrel of oil fell by more than 5%, a decline of $4.80, and over the past week the price slid from $93 to nearly $80 by morning trading. Market traders see the move as growing optimism that the escalation in the Middle East may be ending.

Oil had surged in recent months during the war with Iran. According to the report, Iran closed the Strait of Hormuz and halted a quarter of the world’s oil traffic, while also striking oil and gas fields in Gulf states and disrupting production. North American WTI crude fell by almost 6%, and Brent crude, the global benchmark, dropped by similar rates. Natural gas was down more than 3%, and heating oil fell 5.5%.

If the Strait of Hormuz fully reopens, prices are expected to fall further. In March, ahead of Operation “Roar of the Lion,” a barrel cost about $60, but damage to Gulf oil infrastructure means it is unclear whether prices will return to that level.

The lower oil price is also expected to reach Israel’s economy. Because Israel’s monthly fuel price is set by the average oil price over the final five days of the month, consumers should see cheaper gasoline at the pumps next month. The deal also drew political criticism, with Finance Minister Bezalel Smotrich saying, “The agreement with Iran is bad for Israel and for the entire free world.” He said Israel would have to continue working to topple the regime on its own and in creative ways. Sami Zenti, head of Moshav Shomera in northern Israel, said residents felt worse than after October 7 because, in his words, they were not sure the state could make independent decisions.