The United States and Iran have reached a significant agreement to end their conflict, prompting the United Kingdom, France, Germany, and Italy to announce their readiness to lift sanctions on Iran in response to steps taken on its nuclear program, according to a joint statement from the countries' leaders [1]. President Donald Trump declared that the Iran deal is "now complete," and announced that the Strait of Hormuz will reopen without a toll system, with the U.S. ending its naval blockade of Iran [2]. The official signing ceremony for the peace agreement is scheduled to take place in Switzerland on Friday, at which point the strait will be reopened for oil shipments following mine removal operations [2].
As part of the agreement, the U.S. will release $12 billion in frozen assets to Iran before the start of negotiations, as reported by Mehr news agency and cited in a 14-point memorandum of understanding between the two nations [1]. Pakistan Prime Minister Shehbaz Sharif, who acted as a mediator, confirmed the immediate and permanent termination of military operations on all fronts, including Lebanon, and stated that mediators will facilitate meetings this week to lay the groundwork for technical talks and the official signing [2].
The market reaction was swift and significant. Oil prices tumbled, with West Texas Intermediate (WTI) crude down 3.88% on the day at $79.70 according to FXStreet [1], while U.S. crude oil futures for July delivery dropped over 5% to $80.25 per barrel, and Brent futures for August delivery fell 4.26% to $83.31 per barrel, both hitting their lowest levels since March 10 [2]. The CEO of oil tanker company Frontline expressed optimism that ship traffic through the Strait of Hormuz will resume quickly once the deal is implemented [2].
Equity markets responded positively to the news. U.S. futures rose, with Dow Jones Industrial Average futures up 342 points (0.7%), S&P 500 futures up 0.9%, and Nasdaq 100 futures up 1.4% [2]. Asian equities also surged, with South Korea's Kospi jumping 5.1%, Japan's Nikkei 225 climbing 3.6%, Topix advancing 2.6%, and Australia's S&P/ASX 200 gaining 1.3% [2].
Before the disruption in early March caused by Iranian attacks, about 20% of the world's oil supplies passed through the Strait of Hormuz, and the recent conflict had triggered the largest oil supply disruption in history [2].
CONCLUSION
The U.S.-Iran peace deal and the reopening of the Strait of Hormuz have led to a sharp decline in oil prices and a rally in global equities. The agreement marks a major de-escalation in the region, with significant implications for energy markets and international relations.