Oil tumbles to a three-month low as a US-Iran-Israel peace deal eases fears over global energy supplies.

Global crude oil prices declined to $82 per barrel on Monday after the United States, Israel and Iran reached an agreement aimed at ending the conflict across the Middle East, including in Lebanon, and restoring access through the strategic Strait of Hormuz.

Brent crude, the international benchmark for oil prices, dropped by 5 per cent to $82.90 per barrel.

The benchmark last traded at this level in March.

Meanwhile, US West Texas Intermediate (WTI) crude fell by 4 per cent to $80 per barrel.

At the onset of the conflict in February, Brent crude had climbed from $62 per barrel on February 16 to $79 per barrel by March 2 as tensions in the Middle East intensified.

During the height of the war, oil prices surged to as much as $125 per barrel in April.

The latest decline, however, comes after the announcement of an agreement to bring the hostilities to an end.

Reports indicated that the United States and Pakistan said the agreement to reopen the crucial Strait of Hormuz is expected to be signed on Friday in Switzerland, a development seen as a significant step towards ending months of fighting that claimed thousands of lives and disrupted global energy markets.

Although only limited details of the arrangement have been disclosed, US President Donald Trump said the Strait of Hormuz, a major route for global oil shipments, would reopen once the agreement is formally signed.

“The Deal with the Islamic Republic of Iran is now complete,” US President Donald Trump posted Sunday on social media.

“Ships of the World, start your engines. Let the oil flow!”

Shortly afterwards, Iran’s Deputy Foreign Minister, Kazem Gharibabadi, said in televised remarks that the agreement brought an “immediate end” to the war involving the countries and that discussions would continue within two months in pursuit of a “final agreement.”