Peace memorandum sent crude oil prices falling 4% on Monday

Crude oil prices tumbled by 4% and 5% on Monday reaching a three-month low after President Donald Trump announced the U.S. and Iran had signed a memorandum of understanding to end the Iran war and reopen the Strait of Hormuz.

Both benchmarks dropped to the low $80 range and erased some of the large gains they had made since the start of the war and closed at their lowest levels since March 4.

Brent crude futures settled down $4.16, or 4.76%, to $83.17 a barrel.

U.S. West Texas Intermediate settled at $80.75, down $4.13, or 4.87% on the New York Mercantile Exchange. At one point Monday morning, WTI shed 5.4% to change hands at $80.30/bbl.

The memorandum of understanding has been signed by Trump and Vice President JD Vance and Iranian parliament Speaker Mohammad ​Bagher Qalibaf, one U.S. official said. An official signing ceremony for the agreement is due to be held on Friday in Geneva.

Iran’s semi-official Mehr news agency said the draft deal called for reopening the Strait of Hormuz within 30 days under Iranian arrangements.

One analyst at JPMorgan Asset Management suggested the tumbling oil prices could provide a massive tailwind for global stock markets by prompting a broader equity rally and clearing a path for central banks to cut interest rates.

Natural gas prices finished up for the day at $3.158 MMBtu with a gain of $0.038 or 1.22%. European natural gas prices plummeted by roughly 6% following the announcement of the landmark US-Iran framework agreement, with the breakthrough significantly easing market anxiety over prolonged energy disruptions.

A majority of Oklahoma energy stocks finished down on Monday with Empire Petroleum falling 7%, and Helmerich & Payne, Mammoth Energy Services and SandRidge Energy each at 6%.