LONDON — Oil prices dropped and stock markets surged Monday after the United States and Iran announced a framework deal to end their war, with President Donald Trump promising the reopening of the Strait of Hormuz, one of the world’s most critical shipping routes.
Brent crude, the global benchmark, fell 4.7% to S83.24 a barrel, while shares across Asia and Europe rallied. Japan’s Nikkei 225 closed 5% higher, South Korea’s Kospi gained 5.2%, and Germany’s DAX and France’s CAC 40 rose about 1.7%. London’s FTSE 100 added 0.6%.
The deal, confirmed by Iran’s deputy foreign minister Kazem Gharibabadi on state TV, is set to be formally signed in Switzerland on June 19. Pakistan, which helped mediate the agreement, said the accord would reopen the Strait of Hormuz, closed since late February after U.S. and Israeli airstrikes on Iran.
Trump celebrated the deal on social media, writing: “Let the oil flow!” His announcement was met with immediate relief in energy markets, which have been roiled for months by soaring prices and supply disruptions.
Still, analysts warned the optimism may be premature. Vandana Hari of energy consultancy Vanda Insights said the lack of detail in the agreement “is likely to inject unease and uncertainty into the market,” predicting volatility in the days ahead.
Energy experts also cautioned that restoring normal shipping through the strait will take time. Mines must be cleared, tankers queued for passage, and production restarted. Andrew Lipow of Lipow Oil Associates estimated the process could take weeks to six months. Retired U.S. Navy Rear Admiral Mark Montgomery told the BBC that “getting back to normal will not be an overnight thing,” suggesting it could take 30 to 45 days before oil flows smoothly again.
The Strait of Hormuz, through which about 20% of the world’s oil and liquefied natural gas normally passes, has been at the center of global energy turmoil since the war began. Brent crude, which traded near S70 before the conflict, spiked to S120 at its peak.
Asian economies, heavily reliant on Middle Eastern energy, were among the hardest hit. Monday’s rally in Tokyo and Seoul reflected relief that supplies may soon stabilize, though experts say the backlog of tankers and damaged infrastructure will slow recovery.
The deal marks a turning point in the conflict, but with Iran’s nuclear program and regional militias still unresolved, analysts say the path to lasting peace and stable energy markets remains uncertain.
