LONDON (AP) — Oil prices plunged and global equities surged Monday after the United States and Iran announced a deal to end their three‑month war and reopen the Strait of Hormuz, a key maritime passage for global energy supplies. The agreement, confirmed by mediator Pakistan, is scheduled to be signed in Switzerland on June 19.
The Strait of Hormuz, through which about one‑fifth of the world’s crude oil passes, had been closed by Tehran following US‑Israel strikes that triggered the conflict. US President Donald Trump, celebrating his 80th birthday, declared on social media that the deal was “now complete” and authorized the reopening of the strait. Iran’s Deputy Foreign Minister Kazem Gharibabadi said the accord put an “immediate end” to hostilities, though details of the agreement remain unclear.
Crude prices fell as much as five percent, with West Texas Intermediate trading near S83 a barrel, down from highs above S110 earlier in the conflict. Analysts said the drop eased fears of renewed inflation pressures, which had unsettled investors and raised expectations of tighter monetary policy by the US Federal Reserve. “Oil down takes the inflation impulse down,” said Stephen Innes of SPI Asset Management, noting that lower energy costs reduce inflation risks and give growth equities room to recover.
Markets across Asia and Europe rallied on the news. Tokyo’s Nikkei index closed up five percent, while Seoul also posted strong gains. Shanghai, Sydney, Singapore and Taipei rose more than one percent, and London, Paris and Frankfurt opened higher. In Jakarta, easing energy concerns helped the rupiah strengthen to its best level since May, reversing earlier record lows.
Traders are now focused on the next steps, including the signing ceremony in Switzerland, mine clearance operations in the strait, and whether Israel will hold back from further military action. Analysts caution that the durability of the deal depends on the negotiated terms and the willingness of both sides to maintain restraint.
The end of the conflict marks a significant moment for global markets, which had been rattled by soaring energy prices and fears of supply disruptions. For households and businesses worldwide, the reopening of the Strait of Hormuz offers relief from inflationary pressures and signals a potential stabilization in the global economy, though uncertainty remains over the long‑term viability of the peace agreement.
