Global markets surged on Monday while oil prices tumbled after the United States and Iran confirmed they had reached an agreement to end months of conflict and reopen the strategic Strait of Hormuz.
The breakthrough triggered a wave of optimism across financial markets, easing fears of prolonged supply disruptions and another spike in global inflation.
Pakistan, which mediated the negotiations, announced that a formal signing ceremony for the agreement is scheduled to take place in Switzerland on June 19.
The deal brings to an end nearly three months of hostilities that had rattled energy markets and heightened geopolitical tensions across the Middle East.
U.S. President Donald Trump confirmed the development in a social media post on Sunday.
“The Deal with the Islamic Republic of Iran is now complete,” Trump wrote.
“I hereby fully authorize the toll free opening of the Strait of Hormuz, and, simultaneously herewith, authorize the immediate removal of the United States Naval blockade. Ships of the World, start your engines. Let the oil flow!”
Iran’s Deputy Foreign Minister, Kazem Gharibabadi, also confirmed the agreement, saying it would bring an immediate end to the war, while negotiations toward a final settlement are expected within two months.
However, details of the agreement remain unclear, raising questions about how key issues — including Iran’s nuclear programme and regional security concerns — will be addressed.
The Strait of Hormuz, through which roughly one-fifth of global oil supplies pass, had been effectively shut after the conflict erupted on February 28 following U.S.-Israeli strikes on Iran.
With fears of supply disruptions easing, global oil prices fell sharply. Brent crude dropped more than four percent to around $83.60 per barrel, while U.S. West Texas Intermediate also posted significant losses.
The decline in crude prices eased concerns that central banks, including the U.S. Federal Reserve, might be forced to raise interest rates again to combat inflation.
Investors responded positively across global stock markets.
Asian shares rallied strongly, with Tokyo and Seoul gaining more than five percent, driven largely by technology stocks. Markets in Shanghai, Sydney, Singapore and Mumbai also advanced, while Manila posted gains exceeding six percent.
European markets opened higher, and U.S. stock futures pointed to a strong start on Wall Street.
Analysts cautioned, however, that while the agreement marks an important step toward de-escalation, major challenges remain.
Questions over Iran’s compliance with future agreements and the role of regional actors such as Hezbollah are expected to shape the next phase of negotiations.
