Brent falls below $80 per barrel on report U.S. will allow Iran to sell oil immediately

Oil prices fell to their lowest level in three months Tuesday, as the U.S. will reportedly allow Iran to immediately begin selling crude under the terms of the deal to end the conflict.

Brent crude futures briefly fell 5% to $78.94 per barrel, the first time the international benchmark has traded below $80 since March. U.S. West Texas Intermediate futures were down about 5.9% to $76.02.

People familiar with the matter told The Wall Street Journal that oil sanctions relief for Iran will take effect immediately after the agreement is signed.

A senior U.S. official told CNBC that Iran can only access the benefits of the agreement if they abide by their commitments under the deal. These include not pursuing a nuclear weapon, neutralizing its enriched uranium and not interfering with traffic in the Strait of Hormuz, the official said.

The push to resolve the war will dominate discussions at the G7 leaders summit in Évian-les-Bains, France, starting Tuesday, with further details of the memorandum of understanding expected to be released later this week. The U.S. and Iran have given conflicting accounts of what is actually in the deal.

"Nobody has seen any text, so if there's an agreement that was reached three days ago, it is a bit odd that we haven't seen it," Amos Hochstein, who advised former President Joe Biden on energy, told CNBC's "Squawk Box" on Tuesday.

Washington and Tehran had earlier reached a provisional agreement on Sunday, which would extend the U.S.-Iran ceasefire for 60 days and reopen the Strait of Hormuz to all shipping.

Arriving at the G7 meeting, President Donald Trump said the peace framework with Iran has been signed, adding that the Strait of Hormuz will "completely reopen" on Friday, free of Iranian tolls. Trump said a formal signing ceremony would take place on Friday in Geneva.

Hapag-Lloyd, the German global container shipping giant, welcomed the prospect of a peace agreement and an end to all military action in the region as "good news for us, for our crews, and for our customers."

"We hope that our four remaining ships will be able to pass through the Strait of Hormuz this weekend," Hapag-Lloyd said in a statement.

West Texas Intermediate.

However, the head of the world's largest tanker operator has suggested a more complicated path to normalizing traffic through the strait, which accounted for around 20% of the world's oil supply before the outbreak of the war at the end of February.

Jotaro Tamura, chief executive of Mitsui OSK Lines, told the Financial Times on Tuesday that many operators could wait weeks until they allow their tankers to resume transit through the strait.

"What will have to come in place is not just a simple agreement between the relevant countries, but it has to be material and translated into the real situations in the Strait of Hormuz, so that shipping lines can make themselves comfortable to go through," Tamura said.