Oil prices tumbled after President Donald Trump said the U.S. has completed a deal with Iran to reopen the Strait of Hormuz.

U.S. crude oil futures for July delivery dropped below $80 per barrel for the first time since March in early trading in Europe before paring losses slightly. Prices were down 5.5% at $80.15 per barrel by 5:40 a.m. ET. Brent futures, the international benchmark, for August delivery traded about 5.1% lower to $82.87.

Energy stocks came under pressure in early trade in Europe, with the Stoxx 600 Energy Sector falling 2.3% at the open. In London, the FTSE 100 Energy Sector dropped 4%, with BP down 3.8% and Shell falling 3.7%.

"The Deal with the Islamic Republic of Iran is now complete," Trump said in a Truth Social post. Hormuz will open without a toll system and the U.S. will end its naval blockade of Iran, the president said.

"Ships of the World, start your engines," Trump said. Let the oil flow!"

Trump, in a later post, said that the strait would open on Friday, the day the official peace agreement signing ceremony is set to be held in Switzerland.

"With the opening of the Strait upon the signing of the Deal on Friday, for purposes of mine removal, oil will flow on both ends again for the Region, and the World!" he said.

U.S. crude prices this year

About 20% of the world's oil supplies passed through the Hormuz strait before tanker traffic plunged in early March due to Iranian attacks. The disruption to Hormuz has triggered the biggest oil supply shock in history.

Pakistan Prime Minister Shehbaz Sharif said Sunday that the U.S. and Iran have declared an immediate and permanent termination of military operations on all fronts, including Lebanon. The Pakistani prime minister has served as a mediator between the U.S. and Iran.

"We would like to thank the United States of America and the Islamic Republic of Iran for their commitment to finding a diplomatic solution to the conflict," Sharif said. Mediators will facilitate meetings this week to lay the foundation for technical talks and the official signing ceremony, he said.

The CEO of the oil tanker company Frontline told CNBC last week that he expects ship traffic through Hormuz to pick up quickly if the U.S. and Iran reach a credible deal.

"I'm actually very optimistic the minute the tide turns and the U.S. and Iran have found some sort of agreement, at least not to attack shipping, that those transits are going to resume pretty quickly," said Frontline CEO Lars Barstad.

Futures tied to the Dow Jones Industrial Average added 440 points points, or 0.9%. S&P 500 futures climbed 1.14%, while Nasdaq 100 futures popped 1.79%.

Asia-Pacific markets also rose, with South Korea's Kospi leading the advance in the region, rising 5.56%; the small-cap Kosdaq added 0.74%. Japan's Nikkei 225 added 4.90% while the Topix rose 3.32%. Hong Kong Hang Seng Index was 0.45% higher, while the mainland's CSI 300 was up 1.47%.