Oil prices fell sharply on Sunday after US President Donald Trump declared a deal with Iran “complete” and announced the “immediate toll-free reopening of the Strait of Hormuz”, a key artery for global energy supplies.Brent crude dropped 3.9 per cent to $84 a barrel, while US crude fell 4.8 per cent to around $81 a barrel. The decline added to losses recorded on Friday, when Brent slipped 3.4 per cent and US crude shed 3.2 per cent.The Strait of Hormuz, through which a significant share of the world’s oil shipments pass, has effectively remained closed since the conflict erupted in late February. According to an Iranian lawmaker, some commercial vessels had been paying an average of about $2 million to transit the waterway.Analysts had warned that continued disruption in the strait could drive oil prices into the mid-to-high $100 range and push petrol prices in the United States to record levels. Rapidan Energy President Bob McNally told ABC’s This Week that fuel prices could have risen to as much as $5 a gallon without an agreement.Trump announced the breakthrough on Truth Social, saying the agreement with Tehran had been finalised and authorising the removal of restrictions on maritime traffic.“The Deal with the Islamic Republic of Iran is now complete,” Trump wrote.“Congratulations to all! I hereby fully authorise the toll free opening of the Strait of Hormuz, and, simultaneously herewith, authorise the immediate removal of the United States Naval blockade.”The president added, “Ships of the World, start your engines. Let the oil flow!”Trump’s announcement came hours before a UFC event at the White House marking his 80th birthday.The development followed days of diplomatic efforts involving several mediators, including Pakistan. Prime Minister Shehbaz Sharif said a peace agreement had been reached after intensive negotiations between Washington and Tehran.Sharif said both sides had agreed to the immediate and permanent cessation of military operations, including in Lebanon, and that the agreement would be formally signed in Switzerland on June 19.In a post on X, Sharif stated, “Following intensive talks, we are pleased to announce that the Peace Deal between the United States of America and the Islamic Republic of Iran has been REACHED. Both sides have declared the immediate and permanent termination of military operations on all fronts, including in Lebanon.”