Oil prices fell in early Asian trade after Pakistan, which has been mediating an end to the US-Iran war, announced a deal that President Donald Trump said would reopen the key Strait of Hormuz shipping route.

Brent crude, the global oil benchmark, was 3.8% lower at $84.02 (£62.48) a barrel, while US-traded oil was down 4.1% at $81.40.

Pakistan's prime minister, Shehbaz Sharif, said an official signing ceremony would be on Friday, 19 June, in Switzerland.

Trump later posted on social media, “oil will flow”.

The strait had been effectively closed since shortly after the US and Israel launched airstrikes on Iran on 28 February.

Tehran had threatened to attack vessels using the crucial waterway, through which around 20% of the world's oil and liquefied natural gas (LNG) normally passes.

Global energy markets have been on a wild ride in recent months, with prices often rising or falling sharply in response to developments in the US-Israel war with Iran.

Brent crude, which was trading at around $70 a barrel before the conflict started, peaked at about $120 during the war.

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Oil price drops after Pakistan announces US-Iran deal

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