US and Iran to halt military operations around Hormuz
Sydney (15 June)
The US and Iran will halt all military operations around the Strait of Hormuz on 19 June – a move that could eventually enable ships to move oil out of the Persian Gulf – under the terms of an initial peace deal.
“We are pleased to announce that the Peace Deal between the United States of America and [the] Islamic Republic of Iran has been [reached],” Pakistan’s Prime Minister, Shehbaz Sharif, said on 15 June. The deal covers military operations on all fronts, including in Lebanon, Sharif added.
But oil may not immediately flow out of the Persian Gulf. Iran will reopen the Strait of Hormuz on 19 June for mine removal purposes, US President Donald Trump said. The Australian Government has also indicated that the US-Iran Peace Deal will not immediately end maritime disruptions.
“We are pleased the agreement between the US and Iran includes steps towards reopening the Strait of Hormuz and the restoration of freedom of navigation,” Australian Prime Minister Anthony Albanese and Foreign Affairs Minister Penny Wong said.
“While full recovery will take time, restoring this vital trade corridor is essential to easing pressure on energy prices and economies,” they added.
Brent crude oil futures prices fell to their lowest level since 4 March – days after the US-Israeli war in Iran began – soon after the US and Pakistan announced the deal. Brent crude oil traded at $83.25/barrel on 15 June, up from $72.87/barrel before the war began.
Brent crude price declines, linked to reported progress towards a Peace Deal, pushed down Australian fuel prices over the week to 10 June, data from the Australian Competition & Consumer Commission (ACCC) show.
Retail diesel and petrol prices fell across every Australian state and territorial capital over that period, ACCC data show. Retail petrol costs have also dropped below pre-Iran war levels in six of Australia’s eight territorial capitals, but remain elevated in Perth and Hobart, according to the ACCC.
By Avinash Govind