• Oil prices dipped sharply after Trump announced a US-Iran deal.
• The Strait of Hormuz is set to reopen, easing supply concerns.
• Brent crude fell to around $84, while US crude dropped to about $81.
• Analysts warn recovery of oil supply could take several months.
• Stock markets are expected to rise in response to the news.

Oil prices fell sharply on Sunday after US President Donald Trump declared the completion of a deal with Iran, which includes the reopening of the Strait of Hormuz, a crucial route for global oil traffic. Brent crude dropped as much as 4.8%, reaching approximately $83.11, while US crude plummeted 5.2% to around $80.47. This decline follows a trend of decreasing oil prices, which had already been recorded in previous days due to market anticipation of a deal, exemplified by Brent's fall to $84 a barrel earlier that day, according to India Times, BBC, and Al Jazeera.

The announcement comes after intensive diplomatic negotiations led by Pakistan, confirming that both the US and Iran will sign a memorandum on Friday. As Trump stated, “Ships of the World, start your engines,” indicating an eagerness to resume oil trading. The reopening is anticipated to significantly shift oil supply dynamics, although analysts note that it may be several weeks before traffic levels reach pre-war standards due to the lingering geopolitical risks and potential delays in restoring oil production, according to NPR and Bangkok Post.

As stock markets prepped for a surge on Monday following the announcement, the economic implications of the deal were highlighted, especially regarding inflation, which had reached its highest in over three years. The return of oil supply through the Strait could alleviate some inflationary pressure, but immediate relief at the gas pump was unlikely given that prices may not revert to pre-war levels swiftly. Experts caution against overly optimistic expectations, asserting it may take time for oil flows and production capacity to stabilize fully, according to CBS News.